Overview
The Data Processing, Hosting, and Related Services industry is increasingly significant in the digital age, serving as the backbone for cloud computing, data management, and advanced analytics. This sector supports a broad range of industries, including finance, healthcare, retail, and manufacturing, by providing critical infrastructure to store, process, and secure vast amounts of data. Demand for innovation in cloud technology, cybersecurity, and data scalability is accelerating, driven by the exponential growth of digital transformation initiatives and the widespread adoption of IoT and AI solutions. Additionally, evolving data privacy regulations worldwide compel organizations to seek reliable and compliant hosting providers.
M&A activity in this sector is driven by the need to expand service portfolios, access cutting-edge technologies, and gain a competitive edge in emerging markets. Companies often pursue acquisitions to strengthen their capabilities in areas like AI-powered analytics, edge computing, and specialized cloud solutions. Consolidation is also prevalent, as firms look to achieve scale and enhance operational efficiency. For M&A professionals, the Data Processing, Hosting, and Related Services industry presents a robust landscape for strategic acquisitions, fueled by its central role in powering innovation and ensuring data resilience in a rapidly evolving global economy.
Sub-Sectors
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NAICS Code |
Industry Description |
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518 |
Data Processing, Hosting, and Related Services |
Historical PE Investments in Data Processing, Hosting, and Related Services
The graph showcases the percentage of total PE platform acquisitions in the Data Processing, Hosting, and Related Services sector from 2000 to 2022.
Early 2000’s witnessed a decline in acquisitions in this sector, with percentages of total PE investments dipping below 1.5% between 2001 and 2007. This period likely reflects the initial burst of the dot-com bubble and the subsequent cautious investment strategies.
From 2008 onwards, the sector began to gain traction, aligning with the rise of cloud computing and increased data demands. The percentage of acquisitions rose steadily, peaking around 4.5% in 2019. This surge indicates a growing recognition of the sector's potential and its critical role in the digital economy. It is currently one of the top 10 industries as a total share of private equity investments, with the largest percentage of growth.
The future of Data Processing, Hosting, and Related Services in PE is promising with increased funding in the sector, increased M&A activity and a focus on AI and cybersecurity innovations. The sector's critical role ensures steady PE interest, driven by technological advancements and ever-increasing data demands.
Market Summary (2001 - 2024)
- 1,485 - Platform investments
- 3,942 - Add-on investments
- 736 - Total unique private equity firms invested
Top 5 Private Equity Firms Invested in Data Processing, Hosting, and Related Services
Measured by the number of deals in Data Processing, Hosting, and Related Services .
- Insight Partners (New York, NY)
- Vista Equity Partners (Austin, TX)
- Thoma Bravo (Chicago, IL)
- JMI Equity (Baltimore, MD)
- TA Associates (Menlo Park, CA)
Geographical Distribution
Sample Private Equity Investments in our Database
June 2024
TA Associates completed a strategic growth investment in Solarity (St. Louis, MO).
Solarity is a provider of automated clinical data processing solutions for acute and ambulatory healthcare providers.
June 2024
Invictus Growth Partners acquired ThreatModeler (Jersey City, NJ).
ThreatModeler is a Software-as-a-Service (SaaS) platform providing a comprehensive solution for enterprise development teams to design and deploy secure applications and cloud infrastructure.
May 2024
KKR & Co. completed an investment in Cotiviti (Atlanta, GA).
Cotiviti, Inc. is a healthcare service provider that leverages data analytics and technology to limit costs and ensure regulatory compliance for various stakeholders in the healthcare industry.
April 2024
KKR & Co. acquired SunFire(Boston, MA).
SunFire is a cloud-based technology platform focused on providing Medicare Advantage plan quoting and enrollment solutions for health plans and brokers, including both call centers and field marketing organizations.
April 2024
Gemini Investors invested in AccuSearch (Phoenix, AZ).
AccuSearch is a data services provider to the background screening industry.
How Private Equity Info sources data
As a research database and information services company serving the middle market M&A community for 20 years, Private Equity Info ingests enormous amounts of data surrounding transactions, firms, and executives. In addition, our team engages in many conversations daily across the spectrum of investors, investment bankers, and service providers to the M&A community.
This summary report was put together by analyzing the private equity investments collected by our dedicated research team which follows 127,000 key executives, 16,000 firms and 33,000 funds in the M&A industry, or 34 million total data points. Private equity investors, investment bankers and service providers in the M&A space use Private Equity Info to search, identify and download targeted lists of M&A professionals in order to connect with key executives across thousands of companies, firms and funds.