American Tower has agreed to acquire CoreSite, a provider of data centre campuses, at USD 170 per share in cash, for a total of UAD 10.1 billion. The deal has been approved by the boards of both companies and should close by the end of this year, or shortly thereafter. To finance the acquisition while maintaining its investment-grade credit rating, American Tower has obtained financing commitments from JP Morgan.
At the end of September, CoreSite had 25 data centres, 21 cloud on-ramps and over 32,000 interconnections in eight major US markets, with annualized revenues to the end of the third quarter amounting to USD 655 million and adjusted EBITDA at USD 343 million.
American Tower said it will further push CoreSite’s development pipeline in the US, and evaluate the potential for an international expansion. The deal will also boost American Tower’s mobile edge compute business ahead of the expected proliferation of 5G low-latency applications throughout the cloud, enterprise and network ecosystems, establishing a converged communications and computing infrastructure offering with distributed points of presence across multiple edge layers.
The transaction should add modestly to American Tower’s AFFO per share at the start, accelerating over time. CoreSite plans to declare and pay its fourth quarter dividend during Q4, or when the deal closes.
