JLL enhances data center capabilities with strategic acquisition
JLL (NYSE: JLL) has announced the acquisition of SKAE Power Solutions, a New York-based provider of data center technical and project management services. The acquisition aims to enhance JLL's data center capabilities, offering solutions across the complete data center lifecycle. The transaction, expected to close soon, will bring SKAE's 75 employees into JLL's Work Dynamics. The move aligns with JLL's strategy to address the growing demand for data centers, driven by AI and machine learning advancements. SKAE's expertise is expected to bolster JLL’s ability to manage data center site selection, design, testing, and operations management.
- Enhances JLL's data center capabilities across the full lifecycle.
- Adds significant technical depth to JLL’s existing offerings.
- Aligns with growing demand for data centers driven by AI and machine learning.
- SKAE's 75 employees, including experienced cofounders, will join JLL's Work Dynamics.
- Forms JLL's Technical Services division within the Data Center vertical.
- Expected growth in data center storage capacity from 10.1 ZB in 2023 to 21.0 ZB in 2027.
- Transaction subject to customary closing conditions, which may delay finalization.
- Integration risks related to merging SKAE's team and operations with JLL's.
Insights
The acquisition of SKAE Power Solutions by JLL is a strategic move that positions JLL to capitalize on the booming data center market. The increasing demand for data storage driven by AI and machine learning technologies sets a backdrop where this acquisition is likely to yield benefits in both the short and long term. Financially, this enhances JLL's service offerings, enabling it to cover the entire data center lifecycle, from site selection and design to testing, operations and maintenance. This expansion of technical capabilities could attract more clients and potentially lead to increased
Short-term implications include integration costs and potential disruptions as SKAE's operations are assimilated into JLL. However, given SKAE's established reputation and expertise, these challenges are likely to be manageable and temporary. Long-term benefits seem promising, as JLL strengthens its footprint in a rapidly growing sector.
When comparing to industry norms, this acquisition aligns well with the broader trend of consolidation and specialization in the data center market. JLL's move mirrors similar strategies by competitors aiming to boost their capabilities amidst growing demand.
The acquisition of SKAE Power Solutions by JLL brings significant technical advancements in the realm of data center management. SKAE's expertise spans critical areas such as installation of infrastructure, testing and facilities maintenance, which are essential for the seamless operation of data centers. With the anticipated doubling of data generated over the next five years, this move allows JLL to stay ahead of the curve by providing state-of-the-art solutions that meet evolving client needs.
From a technological standpoint, this acquisition enhances JLL's ability to handle the growing complexities involved in data center operations. The addition of 75 skilled employees, including leadership from SKAE, ensures that JLL can offer a high level of technical service and maintain operational resilience.
Moreover, this acquisition reflects a proactive approach to future-proofing against the rapid advancements in AI and machine learning, which are reshaping the data center landscape. This strategic enhancement in technical depth positions JLL to provide more reliable and efficient solutions, likely leading to improved client satisfaction and retention.
The integration of SKAE Power Solutions into JLL's portfolio comes at a time of significant market opportunity. The data center industry is experiencing robust growth, driven by increased data generation and storage needs. JLL's recent Global Data Center Outlook highlights the projected growth in storage capacity from
For retail investors, this acquisition signals JLL's commitment to strengthening its market position and enhancing its service offerings. It also suggests potential for revenue growth as JLL leverages SKAE's expertise to meet the increasing demand for sophisticated data center solutions. The move is likely to be viewed positively by the market, given the projected sector growth and the critical role of data centers in supporting digital transformation.
Investors should note that while the near-term impacts may include integration efforts, the long-term prospects for enhanced revenues and market positioning appear strong. This acquisition is a strategic alignment with the broader market trends towards increased data capacity and advanced technological solutions.
SKAE Power Solutions strengthens JLL's data center technical and project management service
"As we help clients navigate evolving real estate needs driven by the rise in data center demand, we welcome the SKAE team and are excited to enhance our delivery of technical services for our clients' critical assets," said Neil Murray, CEO of Work Dynamics, JLL. "With the continued growth of the global data center market, we're seeing increased opportunity to deliver the specialized expertise required to manage and maintain these assets. This acquisition immediately enhances our ability to expertly support our clients' data center solutions now, and into the future."
JLL's recent Global Data Center Outlook revealed how AI and machine learning are prompting a fundamental shift in data center design, site selection and investment approach. Over the next five years, consumers and businesses will generate twice as much data as all the data created over the past 10 years, prompting data center storage capacity to grow from 10.1 zettabytes (ZB) in 2023 to an expected 21.0 ZB in 2027. SKAE's expertise in planning and engineering, installation of critical infrastructure, testing, facilities maintenance, and operations will enhance JLL's ability to support clients with crucial data center site selection, design, testing and commissioning, upgrades, and operations management.
Since 1998, SKAE cofounders Peter Skae and John McPartland and their team have delivered technical data center needs across a variety of industries including finance, healthcare, education, and government. SKAE's 75 employees will join JLL Work Dynamics, led by Peter Skae who will report to Matt Landek,
"SKAE will be key in scaling JLL's capacity to meet clients' needs and accelerating our abilities in data center management," said Sanjay Rishi,
"We were immediately drawn to the values upheld throughout JLL's global organization, and how closely they reflect our principles at SKAE – particularly JLL's safety-driven culture, and focus on people, procedures, and policies," said Peter Skae, Principal, SKAE. "We are looking forward to joining the organization to bring our data center solutions expertise to JLL's clients."
Layer 7 Capital acted as a financial advisor to SKAE Power Solutions in this transaction.
About JLL
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of
Contact: Jesse Tron
Phone: +1 914 424 0299
Email: jesse.tron@jll.com
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SOURCE JLL-IR
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