American Tower inks $10.1bn acquisition deal for CoreSite
American Tower Corporation (American Tower) has entered into a definitive agreement to acquire CoreSite Realty Corporation (CoreSite) for approximately $10.1 billion in cash.
The deal, which was unanimously approved by the boards of directors of both companies, values CoreSite at roughly $170 per share and include the repayment of CoreSite’s existing debt at closing.
According to both parties, once completed the purchase will create a 'differentiated, comprehensive and interconnected communications real estate platform optimally positioned to benefit from the convergence of wireline and wireless networks amid accelerating global 5G deployments'.
CoreSite's portfolio consists of 25 data centres, 21 cloud on-ramps and over 32,000 interconnections in eight US markets, and as of Q3 2021 generated revenue of $655 million and Adjusted EBITDA of $343 million.
As such, American Tower will leverage CoreSite's strong financial position to bolster CoreSite’s development pipeline in the US as well as evaluating potential international expansion.
“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," said Tom Bartlett, chief executive officer at American Tower.
"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.”
In addition, the acquisition is set to 'transform' American Tower’s mobile edge compute business in preparation for the growth of 5G low-latency applications across cloud, enterprise and network ecosystems. This is turn will create a converged communications and computing infrastructure offering with distributed points of presence across multiple edge layers.
Specifically, the combination of American Tower’s wireless connectivity at the mobile edge and CoreSite’s interconnected data centre facilities at the core edge will create an extended edge for customers.
Under the terms of the agreement, American Tower, through a wholly owned subsidiary, will issue a tender for all of the shares of common stock of CoreSite, following this, the company will form merger to acquire any untendered shares for the same price.
“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 US metro data centre 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," said, Paul Szurek, chief executive officer at CoreSite.
"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 US metro areas, as well as internationally, leveraging American Tower’s extensive presence across the globe. CoreSite’s outstanding team, interconnection platform and data centre 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.”
The deal is expected to close by the end of 2021.