Cologix to Acquire Net Access, Follow Data-Center M&A Trend
**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in July-August 2015.**
On the heels of TierPoint’s purchase of Windstream Hosted Solutions, Cologix says it is buying Net Access, a colocation and workspace-recovery provider with three data centers in northern New Jersey.
This will be Cologix’s 10th acquisition, adding a new market and scale to its network-neutral North American data-center platform. It will enable Cologix to address the New Jersey market and provide an alternative to colocation options in New York City.
The Net Access data centers are each about 30 miles outside New York City, more than 250 feet above sea level and connected via a dark-fiber network that extends to carrier hotels for access to connectivity options.
“Acquiring Net Access will expand Cologix’s service offerings to address new demand and will allow us to introduce our unique footprint elsewhere to 700-plus new customers,” said Grant van Rooyen, Cologix’s president and CEO. “We have been very impressed with the team and operations Net Access has built and look forward to harnessing the strength of the combined company.”
Stefanie Williams, 451 Research’s associate analyst, multi-tenant data centers, said consolidation is typically generated from an expansion by acquisition strategy. There likely will be more acquisitions, especially in Europe, she said.
“Cologix and TierPoint specifically are well known for leveraging this strategy, each making some pretty impressive acquisitions over the last few years,” she told Channel Partners. “As these, and other providers grow, they have additional opportunities to gain funding. Scale is an advantage in the multi-tenant data center (MTDC) sector so firms are looking to grow quickly via acquisition and private equity firms are looking to sell individual assets. Buyers are looking for new geographies, services and skills.”
Net Access’ customers range from small businesses to Fortune 1000 companies, including in the health care, financial, enterprise, IT/hosting and telecom verticals.
Cologix provides interconnection and colocation services in facilities in Columbus, Ohio; Dallas; Jacksonville and Lakeland, Florida; Minneapolis, Montreal, Toronto and Vancouver. It currently serves more than 950 carrier, managed services, cloud, media, content, financial-services and enterprise customers.
When this transaction closes, Cologix will support more than …
… 1,600 customers across its North American data-center platform, which will include 700,000 square feet across 24 data centers in nine markets.
“Our focus has been on expanding our reach because our customers and partners are increasingly asking to grow with us into new markets and for multi-market back-up solutions that we simply could not address as a standalone company,” said Raul Martynek, Net Access’ CEO.
Data-center consolidation is on a record pace this year, with 132 transactions in the hosted-services sector for $10.2 billion year to date, compared to 112 deals for $4.1 billion in all of 2014, according to 451 Research. In North America, there have been 75 deals for $4.2 billion this year compared to 59 transactions, for $2.3 billion, in all of 2014.
“It is quite beneficial to acquire a successful business,” Williams said. “The acquirer gains an operational facility (or facilities) in a new market(s) with what is likely a completely unique customer base, often additional services, and with the human capital to support operations. End users gain extended footprint, as acquirers typically have several other geographically diverse facilities to support disaster recovery or multiple live deployments. Additionally, end users can be sure that the acquiring company is financially stable after a large purchase.”
