Data center operator DataBank, has just entered into an agreement with Zayo Group Holdings, Inc. to acquire zColo and its data center assets.

zColo, a Zayo Group company, currently operates 44 data centers across 23 markets in the United States and Europe. Upon close of the acquisition deal, DataBank will have a total of 64 data centers, 141MW power capacity, 1.1 million square feet of data center space, 18 major network interconnection points, and footprints across 29 markets.

“Simply put, this highly complementary acquisition will allow us to serve customers better. The strategic rationale is fully aligned with our core ‘Data Center Evolved’ strategy built around providing customers broad geographic reach as they move their content and applications closer to the edge,” said Raul K. Martynek, CEO of DataBank.

Through this transaction zColo’s collection of data centers and network interconnection assets will be merged with DataBank’s data center portfolio. Zayo Group will also become a significant customer of DataBank and continue to be an anchor tenant across the zColo facilities.

With a long-term agreement in place, the companies expect to collaborate closely in bringing colocation solutions to Zayo’s fiber customers and private fiber network solutions to DataBank’s colocation and cloud customers.

“This agreement represents a material step in our path to focus on our core Networks business, which we first outlined in February 2019,” said Dan Caruso, CEO of Zayo.

“With approximately 1,200 of the world’s most important data centers on our network, connectivity to major interconnection hubs and data centers will always remain a core part of our business. This transaction, however, will allow our colocation customers to benefit from the scale of a larger operator and allow Zayo to better align its resources around its fiber and connectivity business.”

This acquisition is being funded by an investor group led by Colony Capital, Inc., DataBank’s controlling shareholder, which includes Nuveen Real Estate and others. In addition to leading a consortium of investors for the acquisition, Colony Capital is investing $145 million from its balance sheet to maintain its 20% stake in DataBank.

The acquisition deal is expected to close at the end of fiscal year 2020, subject to customary conditions and regulatory approvals.