American Tower signs $10.1bn deal to buy data center REIT CoreSite Realty

American Tower Corporation, a wireless communications infrastructure provider, has signed a deal worth approximately $10.1 billion to acquire CoreSite Realty Corporation, a Colorado-based data center real estate investment trust (data center REIT).

The deal amount covers the assumption and/or repayment of the outstanding debt of publicly-listed data center REIT at closing.

As per the terms of the deal, American Tower will offer $170 per share in cash to CoreSite Realty’s shareholders.

Commenting on American Tower acquisition of CoreSite Realty, Paul Szurek — CoreSite Realty CEO said “CoreSite’s outstanding team, interconnection platform and data center campus portfolio are a highly complementary fit with American Tower’s existing communications sites, and we believe this partnership delivers significant value to CoreSite’s stockholders and will create an exciting new chapter for our customers, employees and partners.”

American Tower acquisition of CoreSite Realty has been unanimously approved by the board of directors of both companies.

Through the deal, the companies aim to establish a distinct, comprehensive, and interconnected communications real estate platform. Additionally, the platform is likely to be well-positioned to make the most of the convergence of wireless and wireline networks, which is happening in conjunction with rapid deployments of 5G across the globe.

In the quarter ended 31 March 2021, CoreSite Realty has 25 data centers as well as 21 cloud-on-ramps and over 32,000 interconnections in eight of the largest markets in the US.

CoreSite Realty is believed to provide services to more than 1,370 companies, operators of networks, cloud providers, and supporting service providers.

American Tower plans to make use of its financial resources to speed up the development pipeline of CoreSite Realty in the US and also to evaluate the possibility of global expansion in the data center space.

The wireless communications infrastructure provider said that the acquisition of the data center REIT will also change the way it operates its mobile edge computing business.

American Tower stated further that CoreSite Realty could assist it in advancing the development of 5G low-latency applications across cloud, enterprise and network ecosystems in order to build an integrated communications and computing infrastructure service.

Tom Bartlett — American Tower CEO, commenting on American Tower acquisition of CoreSite Realty, said: “We are in the early stages of a cloud-based, connected and globally distributed digital transformation that will evolve over the next decade and beyond. We expect the combination of our leading global distributed real estate portfolio and CoreSite’s high quality, interconnection-focused data center business to help position American Tower to lead in the 5G world.

“As the convergence of wireless and wireline networks accelerates and classes of communications infrastructure further align, we anticipate the emergence of attractive value creation opportunities within the digital infrastructure ecosystem.”

American Tower acquisition of CoreSite Realty is contingent on the latter’s shareholders’ approval as well as other customary conditions, following which it is likely to be completed by the end of 2021, or shortly after that.