11/15/2021 | by
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In two separate acquisition deals involving data center REITs, American Tower Corp. (NYSE: AMT) said it will purchase CoreSite Realty Corp. (NYSE: COR) for approximately $10.1 billion, while CyrusOne Inc. (Nasdaq: CONE) will be acquired by global investment firm KKR and Global Infrastructure Partners (GIP) for approximately $15 billion.

Both deals were announced on Nov. 15. The American Tower purchase of CoreSite is expected to close by the end of the year, while the CyrusOne deal is forecast to close in the second quarter of 2022.

Nick Del Deo, senior analyst at MoffettNathanson LLC, said these deals, and the sale of QTS Realty Trust to Blackstone earlier this year, take place in the context of elevated absolute multiples for data centers as a group. “In this context, the sellers waited for a good time to make their moves.”

The American Tower transaction is expected to create a communications real estate platform optimally positioned to benefit from the convergence of wireline and wireless networks amid accelerating global 5G deployments, the REIT said.

As of the third quarter, CoreSite’s portfolio consisted of 25 data centers, 21 cloud on-ramps, and over 32,000 interconnections in eight major U.S. markets. American Tower said it expects to leverage its strong financial position to further accelerate CoreSite’s attractive development pipeline in the U.S., while also evaluating the potential for international expansion in the data center space.

The transaction is also expected to be transformative for American Tower’s mobile edge compute business in advance of the proliferation of 5G low-latency applications throughout the cloud, enterprise, and network ecosystems.

Tom Bartlett, American Tower’s CEO said, “We are in the early stages of a cloud-based, connected, and globally distributed digital transformation that will evolve over the next decade and beyond. We expect the combination of our leading global distributed real estate portfolio and CoreSite’s high quality, interconnection-focused data center business to help position American Tower to lead in the 5G world.”

Meanwhile, Dave Ferdman, co-founder and interim president and CEO of CyrusOne, said KKR and GIP will provide substantial additional resources and expertise to accelerate the company’s global expansion and help deliver timely and reliable solutions at scale.

“We have built one of the world’s leading data center companies with a presence across key U.S. and international markets supporting our customers’ mission-critical digital infrastructure requirements while creating significant value for our stockholders,” Ferdman said.