CyrusOne Picks Up Two More Data Centers For $490M From Competitor Sentinel

Data center provider CyrusOne has announced plans to acquire two data centers from a fellow enterprise data center operator and designer, Sentinel Data Centers, for the price of $490 million.

CyrusOne on Monday said that it would buy two of Sentinel's East Coast-based data centers, one located in the Raleigh-Durham area of North Carolina and the other in Somerset, New Jersey. The deal will help CyrusOne establish a presence in the Southeast, while also assist the provider in reaching more business customers in the healthcare and financial verticals, according to Carrollton, Tex.-based CyrusOne.

The two new carrier-neutral data centers will bring CyrusOne's U.S.-based footprint to 33 facilities, largely located Texas, the Midwest, and along the East Coast. A facility in Quincy, Wash. is planned for later this year. CyrusOne also has a global presence, with one data center location in Singapore and one in the U.K.

[Related: CyrusOne Fortifies Five More Data Centers With CenturyLink Fiber Network Backbone]

The deal comes at a time in which many service providers, including the large, incumbent telecom providers, are divesting data center assets to keep costs down and stay competitive in the crowded cloud market. While some providers are forgoing running their facilities, some providers, including CyrusOne and St. Louis-based competitor Tierpoint, are building out their footprints and focusing on differentiated services for business customers and channel partners.

CyrusOne said that its data center facilities generated revenues of nearly $50 million in 2016.

The acquisition, which includes Sentinel's NC-1 And NJ-1 locations, does not include its NY-1 location in Orangeburg, N.Y. or its TN-1 location in Memphis, Tenn. The two data center facilities that CyrusOne is gaining includes nearly 30 customers, with more than two-thirds becoming new CyrusOne customers, including five new Fortune 1000 business customers, according to the provider.

"Our goal is to be the preferred global data center provider to the global Fortune 1000," CyrusOne wrote in a statement announcing its upcoming Q4 2016 earnings presentation scheduled for later this month.

CyrusOne also plans to build out the two facilities over time, adding to the 34,000 colocation square feet that are currently available for rent within the new data centers.

CyrusOne said it plans to finance the purchase with proceeds from its forward equity sale that it completed in August along with its recently expanded credit facility. The two companies expect the transaction to close within the next 30 to 45 days as is subject to closing conditions.

’We are very excited about this transaction, which establishes a presence for us in the Southeast, adds a high-quality portfolio of large enterprise customers,’ said Gary Wojtaszek, president and chief executive officer of CyrusOne in a statement.