In a new long-term strategic partnership, investment company Stonepeak will purchase an ownership stake of about 29 percent in American Tower’s U.S. data center business on behalf of certain affiliated investment vehicles. The partnership will be realized by a $2.5 billion equity investment. This implies that the U.S. data center business has an enterprise value of about $10.5 billion (held as subsidiaries of American Tower).
American Tower, one of the largest global REITs, owns, operates and develops multitenant communications real estate. It has a portfolio of around 221,000 communications sites and a densely networked footprint of U.S. data center facilities.
By completing the acquisition, American Tower and Stonepeak claim to be better positioned to capitalize on the demand for low-latency, hybrid IT solutions and agile interconnection across the platform’s data center sites. American Tower’s data center sites are well-placed in key U.S. metro areas. 27 data centers in 10 U.S. markets, more than 450 networks, 23 native cloud on-ramps, and more than 35,000 interconnections make up the platform’s data center portfolio.
“We are pleased to partner with Stonepeak in our U.S. data center business, where we expect to create value through growth in our highly interconnected, cloud on-ramp rich portfolio of data center assets,” said Tom Bartlett, President and Chief Executive Officer (CEO) at American Tower. “In Stonepeak, we’ve found a like-minded partner, with deep communications infrastructure experience and a long-term investment philosophy that aligns with the principles of American Tower and our longer-term strategy in the data centers segment. While this transaction supports the equity financing component for our previously completed CoreSite acquisition, it also creates a platform through which growth opportunities can be strategically evaluated and financed, with American Tower and Stonepeak committed to executing on opportunities as the 5G ecosystem continues to develop.”
CoreSite and Previous Acquisitions
“American Tower has established one of the premier network dense, interconnection-focused data center platforms in the U.S. through CoreSite and previous acquisitions, which we view as a great fit for our core infrastructure strategy,” said Andrew Thomas, Managing Director and Co-Head of Communications at Stonepeak. “The platform is strategically positioned to be at the forefront of the continued shift from a traditional centralized infrastructure model to a cloud-based, connected and distributed digital infrastructure model and we are excited to partner with the American Tower team to help accelerate investment behind this trend in the years to come.”
American Tower, who is also receiving financial advice from CDX Advisors, has J.P. Morgan as its principal financial advisor. Cleary Gottlieb Steen & Hamilton LLP is serving as principal legal advisor to American Tower, who is also being advised by Sullivan & Worcester with respect to certain REIT and tax matters. The only financial advisor to Stonepeak is MUFG Bank. Stonepeak’s main legal counsel is provided by Sidley Austin. Under normal closing conditions, the deal is anticipated to close in the third quarter of 2022.
Management Summary
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American Tower, one of the largest global REITs, owns, operates and develops multitenant communications real estate
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It has a portfolio of 221,000 communications sites and a densely networked footprint of US data center facilities.
CoreSite and Previous Acquisitions
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American Tower is strategically positioned to be at the forefront of the continued shift from a traditional centralized infrastructure model to a cloud-based, connected and distributed digital infrastructure model.
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Stonepeak will partner with American Tower to accelerate investment behind this trend in the years to come.
