Dallas-based CyrusOne Inc. has closed its previously announced acquisition of Zenium Data Centers, a leading hyperscale data center provider with properties in London and Frankfurt, Europe’s two largest data center markets.
“We are excited to take this important step in establishing a European footprint at a time when our customers are expanding globally and demand across the continent is accelerating, particularly for larger deployments,” said Gary Wojtaszek, president and chief executive officer of CyrusOne. “We believe there is a tremendous opportunity as the market continues to evolve rapidly. With this acquisition, as well as additional development sites we have in process in key markets across Europe, we will be very well positioned to help our customers as their business requirements grow, while creating significant value for our shareholders.”
The acquisition of Zenium is the critical first step of CyrusOne’s previously announced European expansion strategy. The European data center market is growing quickly with strong demand for larger deployments, a market segment for which CyrusOne has unique expertise and capabilities. Take-up across London, Frankfurt, Amsterdam and Paris in the first half of 2018 was 87 megawatts, up 50% from the first half of 2017.
“We are thrilled to enter the European marketplace through the milestone closing of the Zenium acquisition,” said Jonathan Schildkraut, executive vice president and chief strategy officer of CyrusOne. “By the end of 2019, we expect our European platform to provide nearly 250 megawatts of potential data center inventory, inclusive of both the Zenium platform together with our organic site development efforts, spread across four major markets, giving us one of the largest platforms in Europe. With this closing achieved, we will now broaden our expansion efforts to include additional markets in other key geographies across the globe.”
The Zenium portfolio includes four operating properties in London and Frankfurt with nearly 20 MW of critical load capacity available for lease-up, as well as additional development sites in London and Frankfurt with the potential to add an incremental 31 MW of critical load capacity upon full build-out.
The transaction meaningfully accelerates CyrusOne’s ability to address the increasingly global needs of its existing customers, according to a prepared statement. At the same time, the company’s expanding footprint will allow CyrusOne to more effectively compete for opportunities from potential customers looking for a single provider with a geographically diverse presence. CyrusOne also expects to benefit from significant operating leverage as the combined company expands within these markets as well as into new markets. CyrusOne currently has development sites in process across London, Dublin, Frankfurt and Amsterdam that, when combined with Zenium, would result in a total prospective European footprint of nearly 250 MW.
CyrusOne financed the Zenium acquisition with proceeds from its $300 million delayed draw term loan and borrowings under its $1.7 billion revolving credit facility. CyrusOne also assumed approximately $85 million of debt outstanding under Zenium’s EUR-denominated credit facility.