DataBank Adding 44 Zayo Data Centers in zColo Acquisition

DataBank is getting 44 Zayo data centers through its acquisition of zColo, Zayo‘s colocation division.

The Zayo data centers include 13 key interconnect locations across 23 markets in the United States and Europe. The acquisition creates one of the largest privately-held data center operators in the United States.

DataBank now has 20 data centers in nine markets.

Zayo will become a significant customer and continue to be an anchor tenant within the zColo facilities.

The transaction should close by the end of the year. DataBank didn’t disclose the acquisition’s financial details.

Zayo’s Long-Term Strategy

Zayo said the transaction aligns with its long-term strategy of focusing on its core networks business.

“The Zayo leadership team, our board and our investors are extremely proud of zColo,” said Nicholas Caruso, Zayo’s vice president of sales and channel. “We believe this business has a tremendous future. But as we have stated previously, this is a business that over time would need additional scale and investment. The transaction provides [DataBank] with this scale, our customers with an expanded set of assets to leverage and our zColo employees with an exciting new opportunity to be part of a rapidly growing business.”

Caruso said Zayo‘s fiber connectivity and network business has been the “key differentiator” and is where it has historically provided the most value to its channel partners.

“This will not change with this transaction,” he said. “However, we believe that the simplification of our business and streamlined focus on our networks business will ultimately allow for more future investment in our network, and more value for our channel partners.”

Benefitting DataBank’s Partners

Scott Askins is DataBank‘s vice president of channel sales.

DataBank’s Scott Askins

“The acquisition will increase our partners’ ability to sell into a much larger geographic footprint, still leveraging DataBank’s best-of-breed colocation and cloud/IaaS/PaaS platforms,” he said. “For instance, it will allow our West Coast partners to sell into California and Seattle metro facilities.”

It also allows partners to sell into Europe, especially for those North American clients that have General Data Protection Regulation (GDPR) requirements, Askins said.

“Finally, the much larger customer/reference base of the combined organization will allow partners to credibly represent DataBank to a greater number of verticals and agencies, thus allowing for a substantial increase in partner opportunity,”

With the Zayo data centers acquisition, DataBank will have:

The Zayo transaction was 18 months in the making, with JP Morgan leading a sales process on behalf of the seller.

“DataBank has differentiated itself in the market with a unique combination of modern data center facilities and hands-on managed security and compliance,” Askins said. “This profile has been attractive to partners with clients in highly regulated industries … who have complex infrastructure needs and are searching for a hybrid mix of cloud and colocation and managed security/compliance services.

“DataBank partners will have greatly expanded options for data center and colocation services, more cloud nodes and greater network diversity, all of which improve options for disaster recovery and hybrid IT solutions,” Askins added.