American Tower Corporation (NYSE: AMT) and data centre REIT CoreSite Realty Corporation (NYSE: COR) said they have entered into a definitive agreement through which American Tower will acquire CoreSite for US$170.00 per share in cash.
The total consideration for the transaction, including the assumption and/or repayment of CoreSite’s existing debt at closing, is approximately $10.1 billion.
The transaction, which was unanimously approved by the boards of directors of both companies, will add CoreSite’s portfolio of 25 data centres, 21 cloud on-ramps and over 32,000 interconnections in eight US markets t American Tower’s portfolio.
Tom Bartlett, American Tower’s Chief Executive Officer, 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 centre business to help position American Tower to lead in the 5G world.
“As the convergence of wireless and wireline networks accelerates and classes of communications infrastructure further align, we anticipate the emergence of attractive value creation opportunities within the digital infrastructure ecosystem. We look forward to welcoming CoreSite’s talented team to American Tower and working together to capitalize on those opportunities to drive enhanced long-term value creation for our customers and shareholders as we continue to connect billions of people across the globe.”
CoreSite generated annualised revenue and Adjusted EBITDA of $655 million and $343 million, respectively, in Q3 2021.
The company has averaged double-digit annual revenue growth over the past five years and is led by a seasoned management team that has established leading positions and a critical presence with cloud service providers, positioning the business well for future organic growth.
CoreSite’s Chief Executive Officer, Paul Szurek, said: “We are excited to partner with American Tower to expand its communications infrastructure ecosystem and accelerate its edge computing strategy through the addition of CoreSite’s differentiated portfolio of U.S. metro data center campuses. The combined company will be ideally positioned to address the growing need for convergence between mobile network providers, cloud service providers, and other digital platforms as 5G deployments emerge and evolve.
“In addition, we expect the enhanced scale and further geographic reach to provide a platform for the combined company to accelerate its growth trajectory and expand into additional U.S. metro areas, as well as internationally, leveraging American Tower’s extensive presence across the globe.
“CoreSite’s outstanding team, interconnection platform and data center campus portfolio are a highly complementary fit with American Tower’s existing communications sites, and we believe this partnership delivers significant value to CoreSite’s stockholders and will create an exciting new chapter for our customers, employees and partners.”
American Tower intends to finance the transaction in a manner consistent with maintaining its investment grade credit rating and has obtained committed financing from J.P. Morgan.
J.P. Morgan is serving as lead financial advisor to American Tower, who is also being advised by CDX Advisors. Cleary Gottlieb Steen & Hamilton LLP is serving as principal legal advisor to American Tower.
Evercore is serving as sole financial advisor to CoreSite and Wachtell, Lipton, Rosen & Katz is serving as its principal legal advisor.