M&A activity in the datacentre sector (businesses and property) generated more than USD12.3 billion in deal values globally in 2011.  The most active market is the USA followed by the UK and Australia.

In a review of finance and investment in the datacentre sector, consulting firm BroadGroup assessed all publicly available data across M&A and fund raising activity.

Around 45% of all M&A deals were below US$100m, with a further 25% valued up to US$250m. But the year was dominated by mega-deals including the KKR, Silver Lake and Technology Crossover Ventures acquisition of hosting and domain provider Go Daddy at US$2 billion and the CenturyLink merger with Savvis valued at an estimated US$2.5 billion. The merger creates a new international player, with 48 data centres in North America, Europe and Asia.

The survey also found that a further US$6 billion had been raised in a range of funding rounds and IPOs in the sector across the year. Almost half of all transactions were in the US$100m to US$700m bracket and almost half used debt financing instruments. J.P. Morgan Chase Bank/J.P. Morgan Asset Management led with the highest number of deal arrangements in the sector, followed by RBC Capital Markets and Barclays Capital in second place; Morgan Stanley and Seaport Capital were in joint third position.

Digital Realty, listed on NYSE has achieved the leading deal of the year raising US$1.5billion in a Global Senior Unsecured Revolving Credit Facility in November, followed by Global Switch with a bond issue of €600m in April 2011.

“We believe that when we add these figures to the additional investment that has been made in extending, upgrading and constructing datacentres the financial scale of the sector has shifted substantially in 2011,” commented BroadGroup.

“These figures still discount the investments and acquisitions occurring in software, technology, and energy innovation to address the datacentre sector. The overall market is generating a significant level of cash and stakeholder value and it will be interesting to watch developments in the coming year.”

BroadGroup has recently launched the new monthly newsletter, Finance and Investment for DataCentres, which includes the monthly share tracker produced by AHV Associates. Tracking 26 stocks, the AHV datacentre index has consistently outperformed both FTSE-100 and Nasdaq-100 since 2009. NYSE listed Interxion and 21Vianet have recently been added to the tracker. The January edition will include a summary of the M&A and Funding review.

BroadGroup also researches and produces the international Finance and Investment Forum series of events and will be hosting DataCenters 2012 in Nice 23-24 May 2012 (www.datacenters2012.com)