Peak 10’s purchase of ViaWest has the potential to create a nationally competitive data-center provider with expanded partner opportunities.

Peak 10 announced Tuesday that it is buying ViaWest, the data center and hybrid IT provider, for $1.68 billion. GI Partners, which acquired Peak 10 in 2014 and previously invested in ViaWest, will be the majority shareholder for the merged company. The move brings the combined company’s operational footprint to 20 markets and 4,4000 customers. Peak 10 CEO Chris Downie says the marriage will “create a leading hybrid IT infrastructure and solutions provider.”

Ovum’s Mike Sapien

“This transformative transaction will expand our scale and geographic reach and we are excited to bring together two companies with cohesive operating philosophies and complementary strengths,” Downie said. ” Our goal is to deploy best practices across the combined company to provide exceptional solutions to our customer base, while driving best-in-class performance by taking advantage of new opportunities for growth.”

Analysts say consolidation around infrastructure has been a trend in the market. Mike Sapien, Ovum’s vice president and chief analyst of U.S. enterprise services, says members of the equity community have been investing in data centers while many systems integrators have tried to divest themselves of the financial burden.

“Many equity firms and multiple data-center operators have been on the hunt to find and roll up large data-center assets. The key difference between the two (equity versus providers/SIs) is the financial structure and funding level for owning data centers has changed radically over the last few years,” Sapien said. “And large providers and SIs have other major businesses that need capital, which puts pressure on funding data-center business units. Most large carriers, for example, can put capital to better use with building out network infrastructure — including more fiber to businesses and broadband to the home.”

Sapien says that that while it remains to be seen if Peak 10 will become a global player in the data-center market, it is gaining momentum domestically.

2112 Group’s Larry Walsh

“This transaction definitely aligns with buying up similar assets to create more scale and market coverage but it clearly puts Peak10 on the map as a major player in the data center and managed IT services map,” he said. “Ironic that Peak 10, which started out as very small, regional, tier 2 market player in the U.S., is now becoming a major U.S. player and emerging global player.”

Larry Walsh, CEO and chief analyst of the 2112 Group, says many cloud service providers are banding together in order to scale out against gigantic service providers.

“Peak 10 assuming control of ViaWest will give it greater geographic reach and service capacity, but will bring more partners and customers under its umbrella,” Walsh said. “The impact on the channel is likely minimal in the short run, as it will take time to combine these two companies; however, the merged Peak 10 and ViaWest will open more opportunities for resellers as Peak 10’s market coverage increases.”

The companies said the deal will likely close in the third quarter.