Data-center operator TierPoint LLC has agreed to buy Cosentry, a cloud, colocation and managed services provider based in Omaha, Nebraska.
The deal is expected to close in March, and terms were not disclosed. Upon closing, Cosentry will operate as a TierPoint subsidiary, under the TierPoint name. Cosentry operates nine data centers in Midwest markets, including Omaha; St. Louis; Kansas City, Missouri, and Kansas City, Kansas; Sioux Falls, South Dakota; and Milwaukee.
St. Louis-based TierPoint provides cloud, managed services and colocation services, operating data centers in Arkansas, Connecticut, Florida, Illinois, Maryland, Massachusetts, New York, North Carolina, Oklahoma, Pennsylvania, Tennessee, Texas and Washington. When the acquisition is finalized, TierPoint will operate 38 data centers in 24 markets in the U.S. and serve more than 6,000 customers.
TierPoint has made more than 10 acquisitions, including two completed in December. In one, the company acquired the data center business of Windstream (Nasdaq: WIN) for $575 million in cash, along with an agreement allowing each company to sell products and services to the other company’s prospective customers. Windstream, of Little Rock, Arkansas, reported that the deal allowed the company to pay down debt, focus its capital on its core telecom businesses and provide expanded data center services to its customers. Windstream also operates a fiber-optic network spanning 121,000 miles.
Also in December, TierPoint acquired AlteredScale, a Chicago-based data center service provider with a 25,000-square-foot data center. Terms of that deal were not disclosed. After the December deals, TierPoint’s data centers totaled more than 525,000 square feet of space.
TierPoint’s significant investors include RedBird Capital Partners, Cequel III, Ontario Teachers' Pension Plan, the Stephens Group, JZ Advisers and Thompson Street Capital Partners. When the Cosentry deal closes, private equity firm TA Associates will join the group. TA Associates acquired Cosentry in 2011.
Gerry Cardinale, managing partner and founder of RedBird Capital Partners, says he is pleased with the build-up strategy over the last year, including the Cosentry acquisition, under TierPoint CEO Jerry Kent. “Under Jerry's leadership, the original TierPoint platform has been transformed through several key acquisitions and continued organic growth across its nationwide facilities base,” Cardinale says.
Kent says the Cosentry acquisition should give TierPoint a strategic advantage for providing data center services in Midwest markets, including economies of scale, along with the financial advantages of having TA Associates joining the investor group.
Data center M&A deals in 2015 included, in September, Equinix Inc. (Nasdaq: EQIX) of Redwood City, California, announcing that it was buying Tokyo-based Bit-isle Inc., owner of six data centers in Japan, for 33.3 billion Yen (U.S. $280 million). The deal was expected to make Equinix the fourth-largest data center operator in Japan. In May, Equinix Inc. agreed to buy Telecity Group Plc for 2.35 billion pounds ($3.6 billion)—a deal that included data centers in U.K., Ireland and the Nordic region.