American Tower expands data center ambitions with CoreSite acquisition agreement
American Tower Corp. (NYSE: AMT) and CoreSite Realty Corp. (NYSE: COR) revealed yesterday an agreement through which American Tower will buy CoreSite for $170.00 per share in cash. Adding in the planned assumption and/or repayment of CoreSite’s debt at closing, the deal is worth approximately $10.1 billion. The deal is expected to close by the end of this year, although “shortly thereafter” is also a possibility, according to the companies.
American Tower plans to begin a tender offer for all of Coresite’s common stock through a wholly owned subsidiary. A merger will follow that will see the acquisition of any untendered shares for the same price payable in the tender offer. The tender offer is subject to the tender of at least a majority of the outstanding shares of common stock of CoreSite and certain other customary conditions.
J.P. Morgan has agreed to commit financing towards the deal, which as receive unanimous approval of both companies’ boards.
CoreSite boasts 25 data centers, 21 cloud on-ramps, and more than 32,000 interconnections in eight major U.S. markets as of this year’s third quarter. The company realized annualized revenue and adjusted EBITDA of $655 million and $343 million, respectively, in the same quarter.
American Tower has been expanding its data center portfolio (see, for example, “American Tower investigates colocation with Colo Atl acquisition” and "American Tower opens edge data center in Pittsburgh") and believes the purchase will create what it calls “a differentiated, comprehensive, and interconnected communications real estate platform” well positioned to benefit from the convergence of wireline and wireless networks. The combination also will improve American Tower’s mobile edge compute business, the company expects.
“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 center business to help position American Tower to lead in the 5G world,” explained Tom Bartlett, American Tower’s CEO. “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 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,” added CoreSite CEO Paul Szurek. “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.”
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Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
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