Digital Realty To Merge With DuPont Fabros In $7.6 Bln All-stock Deal

(RTTNews) - Digital Realty (DLR), a provider of data center, colocation and interconnection solutions, Friday announced that it has entered into a definitive agreement to merge with DuPont Fabros Technology, Inc. (DFT) in an all-stock transaction.

Under the terms of the agreement, DuPont Fabros shareholders will receive a fixed exchange ratio of 0.545 Digital Realty shares per DuPont Fabros share, for a transaction valued at approximately $7.6 billion in enterprise value. This includes $1.6 billion of assumed debt and excluding transaction costs.

The transaction is expected to close in the second half of 2017, subject to the approval of DuPont Fabros and Digital Realty shareholders and other customary closing conditions. The deal has been unanimously approved by the boards of directors of both companies.

Upon closing, the transaction is expected to be immediately accretive to financial metrics, and is expected to further improve balance sheet strength.

The combination of the two companies is expected to create an opportunity to realize up to $18 million of annualized overhead savings, resulting from both companies' complementary business operations.

DuPont Fabros is an owner, developer, operator and manager of enterprise-class, carrier-neutral, large scale multi-tenant data centers.

Digital Realty said it has obtained a fully committed bridge loan facility from BofA Merrill Lynch and Citigroup which will be available, if needed, to finance the transaction.

It is expected that the combination will help grow Digital Realty's presence in strategic, high-demand metro areas with strong growth prospects. It will help in achieving significant diversification benefits for DuPont Fabros' shareholders from the combination with Digital Realty's existing footprint of 145 properties across 33 global metropolitan areas.