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Digital Fortress Increases Seattle Data Center Footprint with digital.forest Acquisition

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Colocation services provider Digital Fortress announced on Monday it has acquired the Seattle-based data center businesses of digital.forest and Fortress Colocation Services for an undisclosed sum. The terms of the transaction were not disclosed.

Although Digital Fortress did not explicitly state in the press release its reason for acquiring digital.forest, one can certainly infer that it had to do with the geographical expansion of its data center footprint. It should also be noted that while the names of Digital Fortress and digital.forest are striking similar, they are separate entities.

Digital Fortress was formed by Halyard Capital, Meritage Funds and Sweetwater Capital as a platform to consolidate the data center colocation market in the Pacific Northwest.

In addition to the acquisition, Digital Fortress has also appointed Mark Hughes its new executive chairman. He previously served as chief financial officer of Inflow Communications and executive vice president of operations at SunGard Availability Services.

Headquartered in Seattle, Digital Fortress provides colocation and related services with a focus on regional small to medium sized enterprises seeking to enhance their overall IT infrastructure capabilities through outsourcing.

In a recent Gartner report, data center outsourcing spending in North America was $33 billion in 2011, while web hosting and colocation totalled $23 billion.

The Pacific Northwest continues to be a hotbed for data center activity as large enterprise colocation customers in the area and companies throughout North America and beyond are  attracted to the region’s data centers due to their ability to service high-density power applications with low-cost, green energy.

Real estate investment trust company Griffin Capital recently acquired a three-building, 155,830-square-foot office and data center fully occupied by AT&T Wireless Services in Redmond, Washington.

Digital Fortress is also expanding through the development of new data centers, including the current expansion of an existing enterprise-class data center located in downtown Seattle. Once the expansion is completed the data center will have over 18,000 square feet of raised-floor space and will be ready for occupancy by July.

“Digital Fortress differentiates its service offering by delivering high-density power applications serviced with a highly efficient and effective operating model,” said Executive Chairman Mark Hughes. “We believe this model delivers best-in-class infrastructure solutions comparable to nationally recognized competitors, but at a more attractive value to customers.”

The investors received legal counsel from Edwards Wildman Palmer LLP, Webster Bank provided debt financing for the transactions, and digital.forest was advised by Media Venture Partners.

Talk Back: Are you currently outsourcing data center services to a facility in the Pacific Northwest region? Do you find data center costs are more affordable in this area than other parts of the United States? Let us know in the comments.

About the Author

Justin Lee has been a staff analyst with theWHIR since 2004. He writes about a range of web hosting and IT-related issues facing the industry on the WHIR website, as well the print version of the WHIR magazine. Follow him on Twitter @Justin_theWHIR.

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