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July 13 (Reuters) - Digital Realty Trust Inc said it would buy private equity owned Telx Group Inc in a deal valued at about $1.89 billion to double its footprint in the rapidly growing business of renting out space to companies to run their data centers.
The deal is the latest sign of consolidation in the data center sector, as U.S. businesses' burgeoning demand for data and video is fueling a revival in fiber optic services and data storage.
The acquisition is the largest deal in the sector since Equinix said in May that it would buy British peer TelecityGroup for $3.6 billion in cash and stock.
Telx, which is owned by ABRY Partners and Berkshire Partners, managed 20 data center space facilities across the United States, of which it leased more than half from Digital Realty, at the end of March.
The transaction is expected to close later in the year and add to 2016 results, Digital Realty said on Tuesday.
Reuters reported in June that Digital Realty was working on a bid to acquire Telx, citing people familiar with the matter.
BofA Merrill Lynch and Morgan Stanley are financial advisers to Digital Realty and Latham & Watkins LLP is the legal counsel. Barclays and DH Capital are financial advisers and Kirkland & Ellis LLP is the legal counsel to ABRY Partners, Berkshire Partners and Telx.
Fitch Ratings on Monday retracted a rating report on Digital Realty that said the company had bought Telx. [ID:nL4N0ZT5IN
Reporting By Lehar Maan in Bengaluru; Editing by Sriraj Kalluvila