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Vantage Data Centers: An Attractive Target

By Luke Smith · 1/31/2017

Vantage Data Centers is front and center as an acquisition target in the industry right now, and it was reported last week Digital Bridge would land the deal in the near future. Digital Bridge acquired DataBank in mid 2016 and is looking to grow their portfolio. Vantage is a data center operator headquartered in Silicon Valley and owns two large campuses – one in Santa Clara, CA and one in Quincy, WA.

2016 was an active year for data center industry M&A, and it looks to be that way again for 2017. In addition to DataBank, Verizon, CenturyLink, and CoSentry’s data center businesses were all acquired over the last year as well. Vantage will most likely be next, and here are three reasons why:

Vantage delivering capacity Silicon Valley

Data center supply in Silicon Valley is at an all-time low, and Vantage is one of few operators delivering capacity. They are currently under construction with “V6”, a multi-story building that will hold 9.0 megawatts (MW) of commissioned power when fully built. V6 is their fifth facility on the campus. They plan to add one more building to the site, known as “V5,” which will deliver up to 15 MW. In efforts to create an additional pathway for future capacity, Vantage acquired a 9-acre parcel, located in Santa Clara, in 3Q 2016. They plan to deliver four, four-story data center facilities on the site, which can hold up to 69 MW of commissioned power when fully delivered. The Vantage acquisition is attractive because they are currently positioned to deliver more future commissioned power than any other data center operator in Silicon Valley, and acquiring qualified sites for data center development in the Valley is extremely challenging.

Vantage customers are attractive

Part of the lure to acquire any data center operator is tied to their existing customers. It’s not uncommon for data center users to expand with operators they already have relationships with. Vantage’s customer list is impressive, and it is reasonable to assume that future demand from these customers will lead to expansion opportunities in Silicon Valley or Quincy.

A strong West Coast presence and expertise

Instead of expanding into other US markets, Vantage chose to re-invest several times in both Silicon Valley and Quincy, growing their footprint and establishing their West Coast presence. This makes them an interesting pick up for a company wanting to quickly grow in this area. Also, Vantage has adapted their facility builds to meet the needs of customers and the challenges of building in a tight market. Their current and additional facilities in Silicon Valley will be multi-story buildings, different than the first data center facilities on their campus and most of the other data center facilities in Silicon Valley.

2017 acquisition activity in the data center industry will be busy, and it’s relatively safe to assume Vantage will be one of the first operators acquired. Their Silicon Valley capacity, customer list, and West Coast presence are reasons they will be attractive to companies like Digital Bridge and others looking to grow quickly.

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