DataBank and Zayo have completed the bigger part of their deal for the zColo data center business. Yesterday the two companies announced the finalization of DataBank’s acquisition of zColo’s business and assets in the US and the UK. The last remaining bit is zColo’s footprint in France, which won’t close until Q1/2021.
The transaction, which was originally unveiled at the end of September, augments DataBank’s footprint to 60 facilities in 28 markets spanning 1.1M square feet of raised floor space. Just what direction they take those assets in will be something to watch in 2021. The company also recently invested in EdgePresence, perhaps suggesting an interest further out on the edge.
Meanwhile, Zayo will focus on its fiber business under recently named CEO Steve Smith. Obviously they’ll also have a more significant relationship with DataBank given their extensive connectivity within the latter’s newly expanded footprint. I wonder whether the company has any other assets its new owners and leadership view as non-core.
This consolidation puts a significant amount of data center infrastructure more directly in the hands of Colony Capital, which invested another $145M to maintain its ownership stake in DataBank as part of the transaction. They were on both sides of this transaction of course, given their stake in Zayo alongside EQT. Meanwhile, TD Securities led the debt financing, which included $500M first and $100M second lien credit facilitites.
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