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Is CyrusOne selling the business at $12bn enterprise value?

Company’s infrastructure footprint includes more than 50 data centres in North American, European, and South American markets, comprising 4.9 million square feet of colocation space and 933MW of available critical load capacity.

By João Marques Lima

Co-founder and Editor, The Tech Capital

5 Mins

September 29, 2021 | 5:45 PM BST

Data centre operator CyrusOne Inc (NASDAQ: CONE) is reportedly considering a stock sale as pressure mounts on slower than expected financial performance and high boardroom turnover, according to sources.

Reuters reports that the real estate investment trust (REIT), whose market capital value stands at US$9.71 billion and total enterprise value amounts to $12.3 billion as of June 30, 2021, is exploring strategic alternatives under which is the potential sale.

The people familiar with the matter added that the Dallas, Texas-based operator is working with investment bank Morgan Stanley (LON: 0QYU) whilst reviewing its options.

CyrusOne and Morgan Stanley did not immediately respond to a request for comment. The sources added that the discussions might not result in a business sale.

CyrusOne stock jumped about 7% on the back of the sale rumours after days of struggling to keep up with the growing market trends of other competitors.

Founded in 2000, the company describes itself as a provider of “mission-critical data centre facilities that protect and ensure the continued operation of information technology (IT) infrastructure for approximately 1000 customers”.

Customers include 200 of the Fortune 1000 companies and nearly half of the Fortune 20 or private or foreign enterprises of equivalent size.

Its infrastructure footprint includes more than 50 data centres in North American, European, and South American markets, comprising 4.9 million square feet of colocation space and 933MW of available critical load capacity with 2.1GW of powered shell available for future development.

The company also has several facilities currently under development across several markets as seen in the table below.



In its latest financial results report, the company posted a revenue of $284.6 million for the second quarter, compared to $256.4 million for the same period in 2020, an increase of 11%. The increase in revenue was driven primarily by a 9% increase in occupied CSF and higher metered power reimbursements.

Net income was $7.4 million for the second quarter, compared to net income of $45.0 million in the same period in 2020, a decrease of 84%.

As of June 30, 2021, the company had gross asset value totalling approximately $9.2 billion, an increase of approximately 15% over gross asset value as of June 30, 2020.

CyrusOne had $3.59 billion of long-term debt, $370 million of cash and cash equivalents, and approximately $1.39 billion available under its unsecured revolving credit facility as of June 30, 2021.

Net debt was $3.38 billion as of June 30, 2021, representing approximately 28% of the Company’s total enterprise value.

In the latest filling, the company also reviewed its 2021 guidance up, expecting $1,155 – 1,185 million in revenues versus $1,135 – 1,175 million in the previous guidance.

CyrusOne EBITDA for the quarter ending June 30, 2021 was $0.144 billion, a 8.91% increase year-over-year. For the twelve months ending June 30, 2021, the EBITDA was $0.522 billion, a 2.84% increase year-over-year.

Investors seem to have also been left uneased by the successive boardroom changes CyrusOne has gone through in the last 24 months.

Long-time CEO Gary Wojtaszek left the business in February 2020, after nine years at the helm. He was succeeded by Tesh Durvasula who was named interim CEO.

In June 2020, Bruce Duncan was named CEO, a role he would leave in July 2021 leading to founder David Ferdman was named interim CEO.

If the sale comes to be, it could take proportions of a new magnitude within the data centre world, likely competing for the time of highest price tag currently held by the Blackstone private equity acquisition of QTS at $10 billion.

QTS has a footprint spanning more than 7 million square feet of owned data centre space within North America and Europe.

Now watch how CyrusOne plans to scale up its European footprint with Matt Pullen, EVP and managing director for Europe at CyrusOne.

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João Marques Lima

Co-founder and Editor, The Tech Capital

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