Telecommunications provider Cincinnati Bell has struck an agreement to acquire data center operator CyrusOne in a cash transaction value at about $525 million.
CyrusOne is a provider of co-location and data center services to enterprises, and is one of the largest privately held data center operators based in the state of Texas. Cincinnati Bell said once the deal closes, CyrusOne will become a wholly-owned subsidiary of the company, retaining its brand and executive management team.
“Data center services are a key strategic focus for Cincinnati Bell, allowing the company to provide next generation computing and communications services for our customers,” Jack Cassidy, Cincinnati Bell’s chief executive officer, said in a statement. “The success of this strategy is evidenced by our ability to organically build the technology solutions segment of our business into a $300 million run rate revenue operation.”
The acquisition of CyrusOne will increase the scale and scope of data center services offered by Cincinnati Bell by adding seven data centers in Houston, Dallas and Austin. Together the facilities have a total of 163,000 square feet of capacity. With the acquisition, Cincinnati Bell will have 17 data centers and a total of 609,000 square feet of data center capacity.
For the full year 2009, CyrusOne generated $58 million in revenue, an 86% growth in sales compared to 2008. Based on first quarter sales, the company is on a run rate of $73 million in sales for 2010 and operating income of $27 million. Its customer base includes a number of Fortune 500 companies in such verticals as oil and gas, technology, financial services and healthcare.
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