DataBank to buy zColo data centers from Zayo

DataBank announced on Tuesday that it has a definitive agreement in place to buy Zayo Holding's zColo data centers. The zColo data centers would bring 44 additional data centers into the DataBank portfolio, including 13 key interconnect facilities across 23 markets in Europe and the U.S.

The deal is slated to close by the end of this year once it passes customary closing conditions and regulatory approvals. Financial terms of the deal weren't available.

In addition to the physical assets, the deal will also add new customers to DataBank's bottom line.  Zayo Group will become a significant customer and continue to be an anchor tenant within the zColo facilities.

DataBank customers will benefit from access to Zayo’s global fiber network in order to get their data anywhere in the world. With a long-term agreement in place, the companies expect to collaborate closely on bringing colocation solutions to Zayo’s fiber customers and private fiber network solutions to DataBank’s colocation and cloud customers.

“This agreement allows both parties to focus on their core strengths,” said Dan Caruso, Zayo Group’s CEO, in a statement. “We’ll continue building the most fiber-rich digital infrastructure in the world while DataBank focuses on hosting the innovations and digital workloads that our fiber and network infrastructure were designed to fuel.”

Having assembled one of the densest metro and long-haul fiber networks in the U.S., Zayo’s data center assets also bring to DataBank network hubs and carrier hotel facilities, making it one of the largest providers of network-neutral interconnections in DataBank's footprint.

The deal was funded by an investor group led by Colony Capital, Inc., DataBank’s controlling shareholder, which includes Nuveen Real Estate and others. In addition to leading a consortium of institutional investors to support the acquisition, Colony Capital is investing $145 million from its balance sheet to maintain its 20% stake in DataBank.

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Last year Zayo Group agreed to be acquired by affiliates of Digital Colony Partners and the EQT Infrastructure IV fund. As part of the deal, Zayo converted from being a public company to a private company.