DATA centre provider Telecity is in early-stage talks to buy an Irish rival as it seeks to expand its capacity.
A deal for Dublin-based Data Electronics, which operates two data centres in the Irish capital, could set Telecity back around £100m.
Talks are understood to be at a very preliminary stage, with no guarantee a bid will be forthcoming.
A spokesman for Telecity declined to comment on rumour and speculation.
The firm has seen a spike in demand for its services as cloud IT solutions become increasingly popular, meaning companies require more capacity for data storage.
Data Electronics is understood to be one of a number of operators in Telecity’s sights.
The firm, whose customers include Walkers crisps, Facebook, and Transport for London, is also growing organically, with three new data centres in the pipeline in London.
The company, which has a value of more than £1bn, has seen its shares increase in value by almost a third in the last year.
In May the firm reiterated its positive outlook for the rest of the year, with analysts on average are expecting it to post a pre-tax profit of £63.3m on revenue of £231.8m.