There has been a big consolidation development in the European internet infrastructure markets today. TelecityGroup and Interxion, two of the continent's largest and most active colocation providers, have announced plans to merge.
Telecity operates more than three dozen data centers across 9 European markets to the tune of about €470M and €221M in annual revenues and EBITDA in 2014. Interxion operates some 39 data centers across 11 countries and will finish 2014 with annual revenues and EBITDA of €340.6M and €146M, respectively. The two expect some £40M in annual opex synergies plus a similar amount on the capex side, which combined would represent £600M in net present value.
The marriage will be an all share merger, with Telecity shareholders emerging with 55% of the combined company, and Interxion shareholders holding the other 45%. Interxion's David Ruberg will take the helm as CEO, while TelecityGroup's John Hughes and Eric Hageman will be Chairman and CFO. The combined company will be listed in London, with an American ADR in the works.
The deal would position the combined company as a larger counterweight to its global competitor, Equinix. Other pan-European competition is rather smaller, which makes one wonder about how European regulators will look at this, both in the EU and in the countries where the two overlap the most - the UK, Netherlands, and Germany. Hard to see them saying no, but they'll probably be looking more closely at the data center world than they usually do.
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