IRISH DATA centre provider Data Electronics has been acquired by UK-based rival Telecity for £87.6 million (€100 million) in cash.

Data Electronics is one of Ireland’s largest providers of data-centre services. It was founded in 1975 and has invested heavily in its two data centres near Dublin. It has recently completed a €15 million expansion of an eco-friendly data centre in north Dublin, which followed an initial €25 million investment in 2008.

The company employs 55 people and had sales of €15.6 million in 2010, up 11 per cent on the previous year.

The company is led by chief executive Maurice Mortell, who will be staying with the business.

“This is an exciting development for Data Electronics,” Mr Mortell said. “With greater combined resources, talent, technology and infrastructure, we’ll be able to deliver even more opportunity and value to our customers.

“Combining our business with Europe’s leading provider of data centres will be a great boost and will help us continue to build on our successful strategy of attracting both Irish and international businesses choosing to locate their digital infrastructure with us here.”

Telecity is one of the biggest players in Europe in the data centre provider sector. The group operates 24 data centres across main European cities, including one near Dublin. It has plans to nearly double its computing capacity. Revenues at the group rose 16 per cent last year.

Mr Mortell said the deal demonstrated that the Irish IT market was “highly viable” and showed support for Dublin’s position as a core European technology and internet hub.

Data Electronics operates two carrier-neutral data centres in Dublin, with a combined capacity of 4,600 square metres and four megawatts of customer available power. These centres are key international internet hubs and offer access to more than 40 carrier networks as well as access to Inex, the Dublin internet exchange.

The company also has 1.5 megawatts of secured incremental customer power with potential for further significant expansion within its existing sites. About 65 per cent of company revenues come from international clients.

Mr Mortell told The Irish Times that the deal took between two and three months to complete and that clients had responded positively to the announcement.

“There’s some great synergies between the two organisations and there is a very good fit between what we do and what Telecity does across Europe.

“The deal gives us ready access to cost capital for future expansion and growth,” he added. “It also gives us access to the expertise and skills that Telecity have in the organisation around data centre builds etc and it allows us access to international markets that we’ve had difficulty getting to in the past.”

Telecity chief executive Michael Tobin said Data Electronics was a successful Irish technology business with strong growth potential.

“There is significant local, national and international demand for high quality, connected data-centre services in Ireland,” he added.