KBS - Digital Infrastructure and Data Centres - Market Insight

M&A STATISTICS

Investments in data centers were in decline between 2017 to 2019, but have since been followed by steep growth over the past three years. It reached nearly $200bn by end of 2022 , with nearly half of that volume concentrated in the last two years. Nevertheless, the average deal size for data center transactions nearly tripled from $80m in 2018 to approximately $235m in 2022 . In 2021, the global number of data center investment deals peaked at 215, showcasing investors’ appetite to grab share in the rapidly expanding digital infrastructure sector. The total value of M&A investments in 2022 remained nearly the same as the year before, largely driven by growing private equity interest. In 2020, private equity accounted for 55% of the value of total data center closed deals in the year, rising to 66% in 2021 and 91% in 2022 . Since 2018, private equity funding has grown by 50% year on-year , on average, reaching $44 billion in total value in 2022.

A 2024 report by Saville’s stated that 26 M&A deals were transacted last year, against 22 in 2022 and 24 in 2021, witnessing the sector’s resilience. Data centers are increasingly perceived as secure long-term investments with strong potential returns (typically 10%+), leading to heightened sponsor interest. Private equity (PE) or PE-backed operators have dominated transactions since 2021, with private transactions taking some major data center players out of the public market. Financial sponsors, including PE funds, real estate funds, and infrastructure investors, have been instrumental in the industry’s growth, providing both capital and strategic guidance.