KKR, GIP Close $15B Acquisition of CyrusOne

Image by Scott Graham via Unsplash.com

International investors KKR and Global Infrastructure Partners have closed the $15 billion acquisition of data center REIT CyrusOne, which was first announced in November last year.

Funds controlled by the two firms acquired all outstanding shares of common stock, including the assumption of existing debt. CyrusOne stockholders approved the merger last month.

Dallas-based CyrusOne also announced that it requested trading of its common shares to be suspended on Friday, asking Nasdaq to delist it. The REIT’s 1.450 percent Senior Notes due 2027 will also be delisted and deregistered from the SEC.

The $90.50 per share price was agreed upon in November, at a premium of about 25 percent to CyrusOne’s closing price on September 27, 2021. KKR and GIP noted that CyrusOne’s leading market position provides ample opportunities to capitalize on growth trends.

Secular growth in data center consumption globally has created tremendous opportunity for skilled data center developers and operators to provide critical infrastructure for their customers, including the world’s leading technology companies, Will Brilliant, partner at GIP, said in a prepared statement.

Ending the year on a strong note

CyrusOne Houston Data Center, part of the portfolio sold to DataBank. Image via Google Street View

In its 2021 fourth quarter earnings report, CyrusOne noted that it closed the year with the strongest leasing quarter since the company’s formation. Overall, the company leased 101 megawatts and 530,000 square feet of colocation space during the fourth quarter—totaling $104.3 million in annualized GAAP revenue. In 2021, CyrusOne reported more than $1.2 billion in total revenue, a 17 percent increase from the previous year.

Sales agreements during the REIT’s final quarter generated approximately $190 million, the report shows. In January this year, CyrusOne also entered into an agreement with DataBank to sell its four Houston data centers for $670 million. Proceeds from this sale will be used for future developments, according to the earnings report.

Morgan Stanley & Co. and DH Capital acted as financial advisors to CyrusOne. On the side of the buyers, KKR Capital Markets led the financing structuring, while Goldman Sachs & Co., Barclays, Wells Fargo Securities, Citigroup and J.P. Morgan were financial advisors to KKR and GIP.

Last year saw the closing of several other large data center deals, reflecting the continued interest of outside investors to capitalize on the sector’s tremendous growth. In June, Blackstone completed its own $10 billion deal to buy QTS Realty Trust. The same week CyrusOne announced its deal with KKR last year, REIT American Tower announced its $10.1 billion acquisition of CoreSite.