After a slowdown in 2023, data center mergers and acquisitions (M&A) are on the rise again, with 2024 potentially set to surpass $40 billion in deal value. According to Synergy Research Group, the industry is nearing the record highs seen in 2021, driven by strong demand for data center capacity and a significant influx of private equity.
While 2021 and 2022 saw peak deal values around $50 billion, 2023 experienced a sharp decline to $26 billion. However, 2024 is already showing signs of recovery, with $36.7 billion in deals closed and an additional $7.1 billion pending. A pipeline of over $20 billion in potential deals could increase this year's total.
“There has been an inexorable rise in the demand for data center capacity, driven by cloud services, social networking and a range of both consumer and enterprise digital services. The rise of generative AI is adding a further boost to demand. Specialist data center operators have either not been able to fund those investments themselves, or they were not prepared to put their balance sheets at risk,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “Meanwhile, data centers are very much being viewed as long-term safe havens for investments, even during turbulent times, which has caused a huge influx in private equity. We do not anticipate that picture changing any time soon.”
Since 2015, Synergy has tracked 1,381 data center M&A deals, totaling $276 billion in value, highlighting the sector's growing importance and investment appeal.
Read the full press release here.
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