collected by :John Locas
Washington-based DuPont Fabros operates 12 data centers in three major U.S. markets, including Silicon Valley and Northern Virginia, while Digital Realty operates 145 data centers globally.
DuPont Fabros shareholders will receive a fixed exchange ratio of 0.545 Digital Realty shares per share held, the companies said.
Digital Realty and DuPont Fabros, which rent out space that companies use for data centers, have also benefited from the surge in demand for data and video.
DuPont Fabros’s shares were up 12 percent in morning trading, while Digital Realty’s stock was little changed at $116.77.
BofA Merrill Lynch and Citigroup are Digital Realty’s financial advisers while Goldman Sachs is advising DuPont Fabros.
as informed in
Digital Realty already boasts 145 properties across 33 global metropolitan areas.Further, the DuPont Fabros buyout would help Digital Realty reinforce its hyper-scale product offering, as well as grow the blue-chip customer base.
It is also anticipated to be immediately accretive to financial metrics.Shares of DuPont Fabros were up 9.83% during Friday’s regular trading session.Per the deal, for each share of DuPont Fabros, its shareholders would receive a fixed exchange ratio of 0.545 Digital Realty shares.
In a major development in the data center REIT market, Digital Realty Trust, Inc. DLR announced on Jun 9 that it is set to acquire DuPont Fabros Technology, Inc. DFT .
This move would enhance Digital Realty’s portfolio in the top U.S. data center metro areas across Northern Virginia, Chicago and Silicon Valley.
Based on Digital Realty’s Jun 8 closing, this values DuPont Fabros shares at $63.60 each, denoting a premium of around 14.9% considering the latter’s closing price on the same day.Further, based on DuPont Fabros’ 77.8 million shares outstanding as of Apr 2, per Thomson Reuters data , the equity value of the deal comes at around $4.95 billion.Approved by the boards of directors of both Digital Realty and DuPont Fabros, the deal now awaits approval of DuPont Fabros and Digital Realty shareholders, as well as other customary closing norms.
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Why Digital Realty Made The Right Move – DuPont Fabros Technology (NYSE:DFT)
If you aren’t familiar with data center REITs, here are links to three recent SA free articles:REITs 4 Alpha: Data Center REIT DIY “Smart Beta” ETF Update +15.6% YTDWill Data Center REITs Continue To Outperform?
The slide above points out the massive size of DFT data center phases compared with Digital’s more traditional data center fleet.
In Northern Virginia, DuPont Fabros’ nine data centers contain the same square footage as Digital’s 17 data centers.
During the past 52 weeks, DuPont Fabros has traded in a range of $37.54-63.46, hitting all-time highs during today’s trading.
DuPont Fabros SV-1 data center was built out in three phases totaling 360,000 sf with 36.6MW of critical IT load.