Digital Realty (DLR.NYSE) and Interxion (INXN.NYSE) announced today that they’ve agreed to merge their companies to create a data center, colocation and interconnection solution.

A colocation centre is a type of data center where equipment, space and bandwidth are made available for retail customers to rent. Essentially, it bundles a number of different potential costs that customers would otherwise need to absorb, and offers them to customers at a lower rate than their competitors. Ultimately, it’s a good deal for any high-bandwidth and high-kilowatt hour outfit, because it’s a one-and-done solution that lets them get back to work.

“This strategic and complementary transaction builds upon Digital Realty’s established foundation of serving market demand for colocation, scale and hyperscale requirements in the Americas, EMEA and Asia Pacific and leverages Interxion’s European colocation and interconnection expertise, enhancing the combined company’s capabilities to enable customers to solve for the full spectrum of data center requirements across a global platform,” said Digital Realty Chief Executive Officer A. William Stein.

About Interxion

Interxion provides of carrier- and cloud-neutral colocation data centre services in Europe. They have more than 50 data centers in 11 European countries. serving a wide range of customers through more than 50 data centers in 11 European countries. The company boasts 700 connectivity providers, 21 European Internet exchanges and most of the dominant cloud and digital media platforms across its footprint.

Interxion focuses its efforts on attracting customers in well-defined sectors of industry:

  • Digital media
  • Financial services
  • Cloud
  • Carriers and network providers

About Digital Realty

Digital Realty Trust, Inc. is a real estate investment trust that invests in carrier-neutral data centers and provides colocation and peering services. Digital Realty makes its money by supporting the data center, colocation and interconnection strategies of its customers throughout the Americas, Europe, middle-east and Africa, and Asia Pacific regions respectively, offering cloud and information technology services, as well as communications and social networking and financial services.

The companies largest operating areas are:

  • Northern Virginia
  • Dallas
  • Chicago
  • New York State
  • Silicon Valley
  • London

Moving forward

Digital Realty’s European platform will benefit from Interxion’s network of global cloud, digital media platform operators and multinational enterprise customers, while Interxion will get a kickback from Digital Realty’s relationships with many leading cloud platform operators and global enterprises, as well as their access to low-cost capital will help the newly fledged company through its earliest period.

Interxion has a number of data center development projects ready to come down the pipe, with over $400 million invested to date and a total expected investment of roughly $1 billion. These projects are only 40% of the company’s planned expansion, and are expected to be delivered over the next two years.

The terms of the agreement have Interxion shareholders receiving a fixed exchange ratio of 0.7067 Digital Realty shares per Interxion share.  The transaction values Interxion at approximately $93.48 per ordinary share or approximately $8.4 billion of total enterprise value, including assumed net debt.

Digital Realty Chief Executive Officer A. William Stein will serve as CEO of the combined company.  Interxion Chief Executive Officer David Ruberg will serve as the Chief Executive of the combined company’s Europe, Middle East & Africa business, which will be branded “Interxion, a Digital Realty company” at the close of the transaction.

—Joseph Morton

Written By:

Joseph Morton

Joseph is a Vancouver-based author and journalist with both a communications degree and journalism diploma (and a few novels) under his belt. His joie de vivre is to spin difficult technical topics into more human-centric narratives. Buy him a coffee and he'll talk your ear off for hours about privacy issues, blockchain, cryptocurrency and martial arts. Don't talk to him if you're either a tomato, a bully, or if you're not a fan of either 1984 or Tender is the Night. No. You can still talk to him. Just be prepared to be told why you're wrong.

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