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KKR and GIP buy CyrusOne for $15bn

The transaction is not subject to a financing condition and is expected to close in the second quarter of 2022 when CyrusOne will cease trading in the public markets.

By João Marques Lima

Co-founder and Editor, The Tech Capital

4 Mins

November 15, 2021 | 2:39 PM GMT

After weeks of speculation, CyrusOne Inc. (NASDAQ: CONE) has been sold to a group of private equity players in what is one of the largest data centre merger and acquisitions to date at US$15 billion.

The deal will see global investment firm KKR (NYSE: KKR) and infrastructure investor Global Infrastructure Partners (GIP) acquire all outstanding shares of common stock of CyrusOne for $90.50 per share in an all-cash transaction that includes the assumption of debt.

The $90.50 per share purchase price reflects a premium of approximately 25% to CyrusOne’s unaffected closing stock price on September 27, 2021, the last full trading day prior to published market speculation regarding a potential sale of the company.

Dave Ferdman, Co-Founder and interim President and Chief Executive Officer of CyrusOne, said: “This transaction is a testament to the tremendous work by the entire CyrusOne team. We have built one of the world’s leading data centre 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.

“KKR and GIP will provide substantial additional resources and expertise to accelerate our global expansion and help us deliver the timely and reliable solutions at scale that our customers value.”

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The transaction, which was unanimously approved by the CyrusOne Board of Directors, is not subject to a financing condition and is expected to close in the second quarter of 2022, subject to satisfaction of customary closing conditions, including regulatory approvals and approval by CyrusOne stockholders.

Upon completion of the transaction, CyrusOne will be a privately held company wholly owned by KKR and GIP and CyrusOne’s common stock will no longer be listed on any public market.

KKR’s investment is being made primarily from its global infrastructure and real estate equity strategies, and GIP’s investment is being made from its global infrastructure funds.

Waldemar Szlezak, Managing Director at KKR, and Will Brilliant, Partner at GIP, said in a joint statement: “CyrusOne has built one of the strongest data centre companies in the world and has a strong track record of development and operational expertise in addition to delivering best-in-class service to its customers. We are excited to work together with the Company’s proven team to build on CyrusOne’s market leadership and support their customers’ growing data centre infrastructure requirements.

“We see numerous opportunities ahead to continue expanding CyrusOne’s footprint across key global digital gateway markets and look forward to leveraging our global resources, access to long term capital and deep expertise to support the Company’s growth.”

Morgan Stanley & Co. LLC and DH Capital, LLC are acting as financial advisors to CyrusOne and Cravath, Swaine & Moore LLP, Venable LLP and Eversheds Sutherland (International) LLP are acting as its legal counsel.

Goldman Sachs & Co., Barclays, Wells Fargo Securities, LLC, Citigroup and J.P. Morgan are acting as financial advisors to KKR and GIP, with KKR Capital Markets leading the structuring on the financing. Kirkland & Ellis LLP and Dentons (UK & Europe) are acting as legal counsel to the acquiring consortium and KKR, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel to GIP.

CyrusOne’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 with 2.1GW of powered shell available for future development.

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Co-founder and Editor, The Tech Capital

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