QTS Realty Trust (NYSE: QTS) said June 7 that Blackstone will acquire the data center REIT in an all-cash transaction valued at approximately $10 billion, including debt. The deal is expected to support QTS’ growth and help expand the reach of its data center solutions to support new and existing customers.
Upon completion of the deal, QTS will be jointly owned by Blackstone Infrastructure Partners and Blackstone Real Estate Income Trust (BREIT).
The purchase price represents a premium of 21% to QTS’ closing share price on June 4 and a 24% premium to the volume weighted average share price over the last 90 days. The transaction is expected to close in the second half of 2021.
Chad Williams, chairman and CEO of QTS, said the REIT is “confident this transaction is the right step to achieve our strategic objectives in our next phase of growth.” He said the company sees a significant market opportunity for growth as hyperscale customers and enterprises continue to leverage QTS’ infrastructure to support their digital transformation initiatives.
Greg Blank, senior managing director at Blackstone Infrastructure Partners, said QTS “aligns with one of Blackstone’s highest conviction themes—data proliferation—and the required investment makes it well suited as a long-term holding for our perpetual capital vehicles.”
Nick Del Deo, senior analyst at MoffettNathanson, said that enthusiasm for the data center asset class “has never been higher, particularly among private investors.” He added that from a macro perspective, “the company seems to have waited for an appealing time to monetize the business.”
Del Deo also noted that the deal is “consistent with the idea that the smaller [data center] players could make for appealing targets, but does not reduce fragmentation, since QTS will continue to operate as a standalone business. Nothing about the industry structure is changing.”
QTS is expected to continue to be led by its senior management team and maintain its corporate headquarters in Overland Park, Kansas.