Mix of 2 Significant Players in Stock Deal Broadens Digital Realty’s Data Center Holdings in Crucial DC, Chicago and Silicon Valley Metros
In a hit merger of 2 leading players in the increasingly competitive data center sector, Digital Realty (NYSE: DLR )has actually accepted purchase DuPont Fabros (NYSE: DFT) in a deal valued at $7.6 billion including debt.Shareholders of Washington, DC-based DuPont Fabros will receive simply over half a Digital Real estate share per DuPont Fabros share in a stock offer totaling$4.95 billion and valuing DuPont’s shares at about 15%above its Thursday’s closing price. Digital Real estate will also handle $1.6 billion in debt.Private equity and institutional capital is taking on traditional data center property financiers for the best homes, helping drive the latest M&A activity in the sector. The growing proliferation of ever-stronger mobile devices and increasing levels of streaming content continue to drive demand for higher bandwidth leading to robust net occupancy gains across major U.S. data center markets in 2016 that almost matched the record-highs of 2015. In the most recent deal, Digital Realty will contribute to its existing footprint in three crucial markets: Northern Virginia, Chicago and Silicon Valley. The offer will likewise broaden San Francisco-based DLR’s existence in the crucial”hyper-scale “market, which focuses on moving business customers’ IT and information storage functions into so-called ‘cloud’and cloud-hybrid systems.The deal also includes a considerable development play. DuPont Fabros presently has six data center projects under construction in Ashburn, VA; Chicago, Santa Clara, CA and Toronto which are 48 %pre-leased with a total project financial investment of around $750 million. The brand-new centers are all located in markets where Digital Real estate has an existence, and are slated for completion over the next year. The brand-new centers have the ability
of expanding the load capability of DuPont’s platform by more than 25%. DuPont Fabros likewise owns additional land in Ashburn and Oregon which will support the future shipment of facilities generating up to 163 megawatts of capability, together with 56 acres it recently got in Phoenix.