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Mergers and Acquisitions News

Merger of American Digital Realty and Dutch Interxion

DigitalReality_Interxion_merger

Digital Realty and Interxion have announced that a merger of companies will take place. The value of the transaction is $8.4 billion. The newly established entity will be the leader of the global data center market.

Market leader of global data center market

The possible merger of American Digital Realty (DR) and Dutch Interxion has been discussed unofficially for some time now. The transaction was officially confirmed by the companies at the end of October 2019. The result is a giant with 260 data centers worldwide (for comparison, Equinix has about 200). Digital Reality will greatly benefit from the presence in Europe (a total of 93 CPD with a total power of 440MW).
We can also see a return and diversification of business – from the model of a typical wholesaler towards the enerprise and interconnect segment. In addition, unlike Digital Reality, the company’s main rival, Equinix, is very active in the Central European region, where it carries out acquisitions and new greenfield investments. The transaction may result in DR joining the consolidation of, for example, the Polish market as a strategic investor.

Value of the transaction is $8.4 billion

Under the terms of the definitive agreement, a subsidiary of Digital Realty will commence a tender offer to acquire all Interxion’s issued and outstanding ordinary shares in exchange for 0.7067 shares of Digital Realty common stock for each Interxion ordinary share (subject to a minimum tender of at least 80% of Interxion’s outstanding ordinary shares, which minimum may be reduced to 66,6% by Digital Realty).

Upon completion of the transaction, Interxion shareholders will own approximately 20% of the outstanding common stock of the combined company.  Based on Digital Realty’s closing stock price of $132.28 on October 28, 2019, the transaction values Interxion at approximately $93.5 per ordinary share, or approx.. $8.4 billion of total enterprise value, including assumed net debt.  Digital Realty expects to refinance the Interxion debt assumed in the transaction with a combination of investment grade corporate bonds and proceeds from other financings.

The transaction is not subject to any financing condition. The transaction has already been approved by the boards of directors of both Digital Realty and Interxion.  The transaction is expected to close in 2020 and is subject to the approval of Interxion and Digital Realty shareholders and other customary closing conditions.

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