Macquarie Infrastructure Partners Buys Netrality Data Centers


September 04, 2019

Mark Haranas

Netrality Data Centers owns and operates six data centers in the major cities of Chicago, Kansas City, Houston, Philadelphia and St. Louis.

In a move to expand its communications infrastructure footprint, Macquarie Infrastructure Partners IV has acquired Netrality Data Centers as 2019 is poised to break the record for the largest amount of data center M&A deals.

Netrality owns and operates six data centers in Chicago, Kansas City, Houston, Philadelphia and St. Louis, providing a mix of co-location and wholesale data center solutions.

“Netrality’s facilities represent a critical form of digital infrastructure,” said Karl Kuchel, CEO of Macquarie Infrastructure Partners IV, in a statement. “In addition to facilitating the operation of the public internet, the sites also allow companies to build direct private connections between networks, improving performance, reliability and security.”

Financial terms of the deal were not disclosed.

Macquarie Infrastructure Partners IV closed the deal on Aug. 30 by acquiring the company from Abrams Capital Management. Macquarie Infrastructure Partners IV is a fund managed by Macquarie Infrastructure and Real Assets (MIRA), a division of Australia-based infrastructure investment firm Macquarie Group, which manages $129 billion in assets as well as 600 properties.

“Partnering with MIRA’s highly experienced investment team affords Netrality the opportunity to leverage their sector and institutional relationships and provide access to significant growth capital to acquire new properties and businesses that are complementary to our current portfolio,” said Netrality Data Centers CEO Gerald Marshall in a statement. “We look forward to collaborating with our new partners to continue to grow our platform.”

Earlier this year, Macquarie Infrastructure Partners acquired telecommunications specialist Bluebird Network for an undisclosed amount. Bluebird provides high-bandwidth network solutions in rural and urban areas throughout the Midwest with a focus on connecting rural areas to major cities, which is where Netrality’s data centers are located.

M&A in the data center space this year has been on a tear.

A whopping 52 data center-oriented acquisitions closed in the first half of 2019, up 18 percent year over year, setting up 2019 to become a record year in terms of acquisitions. The fast pace is due to enterprises shifting workloads to cloud providers or using co-location facilities to house their IT infrastructure, leading to co-location providers buying facilities to grow their footprint to better serve both enterprises and cloud providers.

The data center market is also being injected with billions of dollars in investment from hyper-scale operators such as Amazon, Apple, Facebook, Google and Microsoft.