KKR and GIP to acquire CyrusOne for $15bn
KKR and Global Infrastructure Partners (GIP) have entered a definitive agreement to acquire all outstanding shares of common stock of CyrusOne for approximately $15 billion.
“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 US and international markets supporting our customers’ mission-critical digital infrastructure requirements while creating significant value for our stockholders,” said Dave Ferdman, co-founder and interim president and chief executive officer of CyrusOne.
“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.”
Valued at roughly $90.50 per share, the all-cash deal includes the assumption of debt and shows a premium of approximately 25% to CyrusOne’s unaffected closing stock price as of September 27, 2021.
Once the deal is completed, CyrusOne will be a privately held company wholly owned by KKR and GIP with CyrusOne’s common stock no longer listed on any public market.
“Today’s announcement is the culmination of a robust strategic review process conducted by the CyrusOne Board of Directors to determine the best path forward for the Company and maximise stockholder value,” said Lynn Wentworth, chair of the CyrusOne board of directors.
“This transaction provides CyrusOne stockholders with significant value and simultaneously positions the Company to even better serve its customers to meet their needs in key markets around the world.”
KKR will finance the from its global infrastructure and real estate equity strategies, while GIP’s investment is being made from its global infrastructure funds.
Having been unanimously approved by the CyrusOne board of directors, the transaction, is expected to close in the second quarter of 2022, subject to s customary closing conditions, including regulatory approvals and approval by CyrusOne stockholders.
“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,” said Waldemar Szlezak, managing director at KKR, and Will Brilliant, partner at GIP.
“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.”
Following the announcement from CyrusOne, as well as the news that American Tower will acquire CoreSite, Synergy Research Group says "the CoreSite acquisition is expected to officially close before the year end putting the 2021 deal value at least 16% ahead of last year".
Further, the company found that as CyrusOne and CoreSite are the third and fourth largest US data center operators in terms of colocation and data centre revenues, the high valuations in both deals were 'driven by both firms having a large data centre footprint and a strong presence in many of the most important US metro markets'.
“Hyperscale operators continue to aggressively expand their operations, while both enterprise and consumer-oriented cloud markets keep on growing rapidly. This is driving an ever-increasing need for data centre capacity,” said John Dinsdale, a chief analyst at Synergy Research Group.
“The level of data centre investment required is too much for even the biggest data centre operators, causing an influx of new money from external investors. In quick succession ownership of four of the top six US data centre operators has changed hands, while the two biggest names in the industry – Equinix and Digital Realty – are increasingly turning to joint ventures to help fund their growth. Over the last 18 months there has been a very notable shift in buyers away from data centre operators and toward private equity investors.”