The sale by Equinix allows it to comply with the European Commission's conditions for regulatory approval of its takeover of Telecity. In connection with this transaction, Digital Realty has granted Equinix an option to acquire the company's facility at 114 rue Ambroise Croizat in Paris and its associated business, for USD 215 million.
Digital Realty will acquire a fee interest in one data centre in Amsterdam and will acquire leasehold interests in the other seven data centres, with a weighted-average remaining lease term of approximately 23 years, including the exercise of contractual extension options. In addition, several of the leased facilities are entitled to statutory rights that give the tenant the ability to renew upon lease expiration, subject to certain exceptions.
The portfolio of eight facilities contains approximately 213,000 net sellable square feet and 24.4 MW of IT load, serving a large base of over 650 blue-chip clients. These clients are predominantly concentrated in the network, cloud and IT services, content and digital media and financial services verticals. The properties are 72 percent utilised, based on available power. The portfolio also provides substantial available capacity, with approximately 6.9 MW of fully-installed power and 62,700 net sellable square feet immediately available for lease as of 31 March. Entitled expansions in the London and Amsterdam facilities could add up to another 14.9 MW of power capacity and 88,900 net sellable square feet to support future growth.
The acquisition is expected to close in the second half of 2016 and is subject to customary closing conditions, including approval by the European Commission, as well as completion of the works council consultation process in the Netherlands.
To help fund the acquisition, Digital Realty has agreed to sell 11.5 million new shares, under a forward-sale agreement with a group of banks. The share sale can be increased by another 1.725 million shares if demand warrants. At the company's current price, the initial sale without over-allotment option would raise around USD 108 million.
