Mayo Clinic sells data center to Epic for $46M

Rochester, Minn.-based Mayo Clinic and Epic Systems have entered a $46 million sale-leaseback deal for the health system's 62,000 square-foot data center, reports Minneapolis/St. Paul Business Journal.

In a sale-leaseback deal, the asset owner sells the asset and then leases it from the new owner. In this case, Mayo is selling the data center to Epic and then plans to lease it for at least four years. Mayo has the option to continue the deal forever, according to the report.

An Epic spokesperson says the deal benefits both organizations. "Epic needed a high quality disaster recovery data center that was some distance away from its production data center yet still close enough to get to easily. Mayo had a high quality data center in an excellent location that was too large for their needs. The terms for the purchase and the terms for Mayo’s portion that they will lease from Epic are at industry standard prices."

In January 2015, Mayo announced plans to adopt Epic's EHR and revenue cycle platforms. As part of this transition, Epic is also building a $6.1 million electronic substation that will support the enhanced needs of the data center. In October, it was reported Epic was working with Rochester Public Utilities to construct the new substation. The vendor will pay for the majority of the project, and RPU will contribute slightly more than $1 million for additional features.

"Due to the planned transfer of selected Mayo Data Center assets to Epic, Epic requests incremental electrical capability and capacity, needed to accommodate projected business growth in forward years," according to a memorandum regarding the substation project.

Editor's note: This story was updated at approximately 10:44 a.m. CST with comments from Epic.

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