The deal is expected to help the parties create a communications real estate platform that is differentiated, comprehensive, as well as interconnected
Data centre operator CoreSite Realty to be acquired by American Tower. (Credit: Akela999 from Pixabay)
American Tower, a provider of wireless communications infrastructure, has agreed to acquire CoreSite Realty, a US-based data centre operator, for around $10.1bn.
The consideration includes the assumption and/or repayment of CoreSite’s existing debt at the time of closing of the deal.
As per the terms of the agreement, American Tower will pay $170 per share in cash to the shareholders of the publicly-listed CoreSite.
The deal has been approved unanimously by the boards of directors of the two firms. It is being taken up by the parties to establish a communications real estate platform that is differentiated, comprehensive, and interconnected.
Besides, the resulting platform is expected to be optimally placed to take advantage of the convergence of wireline and wireless networks in the background of rapid deployments of 5G around the world.
As of Q3 2021, CoreSite had 25 data centres and 21 cloud on-ramps along with more than 32,000 interconnections across eight major markets in the US.
The company is said to cater to over 1,370 enterprises, cloud providers, network operators, and supporting service providers.
It was founded in 2001 as CRG West, a portfolio firm of The Carlyle Group. In 2010, it went public through an initial public offering.
American Tower, on the other hand, is a real estate investment trust (REIT) that owns, operates, and develops multitenant communications real estate. The global REIT has a portfolio of nearly 219,000 communications sites.
It expects to utilise its financial position to further expedite CoreSite’s development pipeline in the US, while also assessing the scope for global expansion in the data centre space.
CoreSite CEO Paul Szurek said: “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 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.”
American Tower said that the deal is also likely to be transformative for its mobile edge compute business. The company said that CoreSite could help it advance the proliferation of 5G low-latency applications across the cloud, enterprise, and network ecosystems to develop a converged communications and computing infrastructure offering.
American Tower CEO Tom Bartlett said: “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.”
The deal, which is subject to CoreSite’s shareholders’ approval and other customary conditions, is expected to close by the end of this year, or shortly thereafter.