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Blackstone to take QTS Realty Trust private in $10 billion deal

Published 06/07/2021, 07:26 AM
Updated 06/07/2021, 12:25 PM
© Reuters. FILE PHOTO: The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid/File Photo

(Reuters) - Investment firm Blackstone Group (NYSE:BX) Inc said on Monday it would take data center operator QTS Realty (NYSE:QTS) Trust Inc private in an all-cash deal worth about $10 billion.

Blackstone Funds, the buyout firm's infrastructure unit along with its non-traded real-estate income trust and other long-term perpetual capital vehicles, will pay $78 per share, which represents a premium of about 21% to QTS' closing price on Friday.

Shares of QTS rose about 21% to hit a record high of $78.24.

The equity value of the deal stands at $5.37 billion, according to Reuters calculations, based on 68.9 million outstanding shares, as of April 29.

A COVID-19 pandemic-led remote working environment boosted demand for cloud services, which are reliant on data centers. QTS has more than 7 million square feet of data center space throughout North America and Europe.

The $10-billion transaction, which is expected to close in the second half of this year, includes the assumption of the data center operator's existing debt.

The deal also includes a 40-day go-shop period, which will let QTS solicit and consider other proposals, the companies said.

Jefferies (NYSE:JEF) and Morgan Stanley (NYSE:MS) were financial advisers to QTS, while Citigroup (NYSE:C) Global Markets, Barclays (LON:BARC), Deutsche Bank (DE:DBKGn) Securities and Goldman Sachs (NYSE:GS) advised Blackstone.

The deal was first reported by the Wall Street Journal earlier in the day.

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