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DataBank to Acquire zColo Data Center Assets

Establishes DataBank as a National Edge Data Center Provider Serving 29 Key Markets Via 64 Data Centers and Over 1 Million Square Feet of Colocation Space

DataBank, a leading provider of enterprise-class colocation, connectivity, and managed services,  announced that it has signed definitive agreements to acquire zColo, including certain U.S. and European data center assets, from Zayo Group Holdings. The zColo acquisition brings to DataBank an additional 44 data centers including 13 key interconnect locations across 23 markets in the U.S. and Europe. The transaction creates one of the largest privately held data center operators in the U.S. and positions DataBank as a leading provider of edge colocation and connectivity solutions to hyperscale, technology and content customers across the U.S.

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In addition to growing DataBank’s geographic footprint to a national scale in strategically important data center markets, zColo will contribute an exceptional base of diversified, blue-chip customers that complement DataBank’s existing relationships. These organizations will benefit from DataBank’s proven customer-focused service framework and operations which will expand to include the following:

  • 64 data centers in 29 markets (up from 20 data centers and 9 markets)
  • Over 3,000 customers including many Fortune 100 and leading cloud and content providers
  • Pro forma annual revenue of over $450M
  • 1.1M raised square feet of data center space
  • 141 MW of installed UPS capacity
  • Over 30,000 network cross connects
  • 18 major network interconnection points
  • 12 cloud nodes

The transaction also significantly accelerates DataBank’s edge and hybrid cloud strategies. The expanded data center footprint provides DataBank’s customers with new geographic options for colocating their mission-critical content, data and workloads closer to end-user populations in key markets like Los AngelesDenverChicagoMiamiBoston and New York City. With double the number of private cloud nodes and public-cloud on-ramps, DataBank customers will have more flexibility to design hybrid IT solutions that adapt as their infrastructure needs evolve.

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“Simply put, this highly complementary acquisition will allow us to serve customers better. The strategic rationale is fully aligned with our core ‘Data Center Evolved’ strategy built around providing customers broad geographic reach as they move their content and applications closer to the edge,” said Raul K. Martynek, CEO of DataBank. “We look forward to integrating zColo into our portfolio while elevating our existing level of service to meet the increasingly diverse workloads of our enterprise customers.”

Having assembled one of the densest metro and long-haul fiber networks in the U.S., Zayo’s data center assets also bring to DataBank a set of valuable network hubs and carrier hotel facilities, making it one of the largest providers of network-neutral interconnections and adding diversity and performance to the DataBank footprint.

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Zayo Group will become a significant customer and continue to be an anchor tenant within the zColo facilities. DataBank customers will benefit from access to Zayo’s global fiber network, enabling companies to get their data anywhere in the world. With a long-term agreement in place, the companies expect to collaborate closely in bringing colocation solutions to Zayo’s fiber customers and private fiber network solutions to DataBank’s colocation and cloud customers.

“This agreement allows both parties to focus on their core strengths,” said Dan Caruso, Zayo Group’s CEO.  “We’ll continue building the most fiber-rich digital infrastructure in the world while DataBank focuses on hosting the innovations and digital workloads that our fiber and network infrastructure were designed to fuel.”

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The transaction is being funded by an investor group led by Colony Capital, Inc., DataBank’s controlling shareholder, which includes Nuveen Real Estate and others. In addition to leading a consortium of world-class institutional investors to support the acquisition, Colony Capital is investing $145 million from its balance sheet to maintain its 20% stake in DataBank. Debt financing associated with the transaction has been underwritten by TD Securities, Truist Securities and Société Générale, acting as Joint Lead Arrangers and Joint Bookrunners for the new Credit Facility.

DH Capital served as financial advisor to DataBank in connection with the transaction and Jones Day served as legal counsel. JP Morgan acted as financial advisor to zColo and Skadden Arps served as legal advisor.

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