Digital Realty Trust Agrees To Acquire Telx In $1.9 Bln Deal

(RTTNews) - Digital Realty Trust, Inc. (DLR), a provider of data center and colocation solutions, and Telx, which provides data center colocation, interconnection and cloud enablement solutions, Tuesday said they have entered into a definitive agreement for Digital Realty to acquire Telx from private equity firms ABRY Partners and Berkshire Partners in a transaction valued at $1.886 billion.

The transaction is expected to close later in the year. It is expected to be accretive to financial metrics in 2016.

The combination is expected to double Digital Realty's footprint in the colocation business, as well as provide its customers access to a leading interconnection platform. Telx's interconnection ecosystem enables the exchange of information between communications service providers, enterprises, content providers and other entities with low latency and diverse connectivity across a global network. It is expected to provide Digital Realty an opportunity for future growth.

As of March 31, Telx managed 1.3 million square feet of data center space operating out of 20 facilities across the country. Of these, two are Telx-owned, 11 are leased from Digital Realty, one is partially sub-leased from Digital Realty and an unrelated third party, and six are leased from third parties.

Separately, Digital Realty Trust said it has commenced an underwritten registered public offering of 10.5 million shares of its common stock. BofA Merrill Lynch, Morgan Stanley and Citigroup are the joint book-running managers for the offering.

The company expects to enter into forward sale agreements with Bank of America, N.A., Morgan Stanley & Co. LLC and Citigroup Global Markets Inc. with respect to 10.5 million shares of its common stock.

The forward purchasers or their affiliates are expected to borrow and sell to the underwriters an aggregate of 10.5 million shares of the common stock that will be delivered in this offering.

The company also expects to grant the underwriters a 30-day option to purchase from the company up to an additional 1,575,000 shares of its common stock to cover overallotments, if any.