In an all-cash transaction valued at about $10 billion including debt, investment firm Blackstone Funds (NYSE: BX) will buy all outstanding shares of common stock of QTS Realty Trust for $78.00 per share. Excluding debt, the acquisition price represents a valuation of $6.7 billion.
QTS manages over 7 million square meters of data center space across North America and Europe. The purchase price is 21% more than QTS’ closing share price on June 4, 2021, and 24% higher than the volume weighted average share price over the previous 90 days. The QTS Board of Directors unanimously authorized the deal, which is slated to close in the second half of 2021.
QTS’ expansion will be aided by Blackstone’s expertise, resources, and constant access to finance. This would enable QTS to expand the reach of its data center solutions for new and existing customers. The parties anticipate that QTS will continue to be led by its senior management team and keep its corporate headquarters in Overland Park, Kansas, when the transaction is completed.
“QTS is powered by its people and continues to set a new standard for service delivery in the data center industry,” said Chad Williams, Chairman and CEO of QTS. “We see a significant market opportunity for growth as hyperscale customers and enterprises continue to leverage our world-class infrastructure to support their digital transformation initiatives. We are confident this transaction is the right step to achieve our strategic objectives in our next phase of growth. I want to thank each of our QTS employees for their continued dedication to a culture of service to others, which has positioned QTS to enter into this transformative transaction.”
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Digitalization of Data
Blackstone’s $649 billion in assets under management include investment vehicles globally. These investment vehicles are focused on private equity, real estate, public debt and equity, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds.
“We are delighted to back QTS and its world-class management team as they continue to scale the company to meet the rising demand for data centers,” said Greg Blank, Senior Managing Director, Blackstone Infrastructure Partners. “QTS aligns with one of Blackstone’s highest conviction themes – data proliferation – and the required investment makes it well suited as a long-term holding for our perpetual capital vehicles. We are committed to a strong, lasting partnership, leveraging Blackstone’s scale, reach, resources and access to capital to drive long-term growth at QTS.”
QTS will be jointly owned by Blackstone Infrastructure Partners and Blackstone Real Estate Income Trust (‘BREIT’).
“We are focused on investing in assets that are benefitting from strong, secular tailwinds, such as the rapid digitalization of data,” said Tyler Henritze, Head of Acquisitions Americas for Blackstone Real Estate. “QTS is a leading provider of data center solutions with a portfolio of high-quality assets in desirable markets, positioning it well to capitalize on these powerful trends in the data center space. We believe the vast expertise across our business will enable the QTS platform to succeed over the long-term.”
Jefferies and Morgan Stanley & Co. are acting as financial advisors to QTS, while Hogan Lovells US and Paul, Weiss, Rifkind, Wharton & Garrison are acting as legal counsel to QTS. Citigroup Global Markets, Barclays, Deutsche Bank Securities, Goldman Sachs & Co. and J.P. Morgan Securities are acting as financial advisors to Blackstone, while Simpson Thacher & Bartlett is acting as its legal counsel.