QTS Realty Trust (NYSE: QTS) and Blackstone (NYSE: BX), yesterday announced that they have entered into a definitive agreement under which Blackstone Infrastructure Partners will acquire all outstanding shares of common stock of QTS Realty Trust. Blackstone will pay $78.00 per share in an all-cash transaction valued at approximately $10 billion, including the assumption of debt.
The transaction was unanimously approved by the QTS Board of Directors and is expected to close in the second half of 2021. Upon completion of the transaction, the parties expect that QTS will continue to be led by its senior management team and maintain its corporate headquarters in Overland Park, KS. QTS operates data centers in North America and Europe occupying over seven million square feet of space.
Market analyst Nick Del Deo of MoffettNathanson said the deal translates to an equity value of about $6.0 billion and an enterprise value of about $8.5 billion. His company has long struggled with QTS’s valuation, however. “On the one hand, we’ve always admired its scrappy mindset,” Del Deo said. “Its leasing volumes have been solid, its Service Delivery Platform is market-leading, and it has engaged in some smart M&A over its history. But on the other hand, the company’s bottom line results have never quite matched its qualitative appeal. Its OFFO/AFFO per share growth has been lacking over the last several years, its capex to drive growth has been extremely high, and its ROIC performance has been toward the bottom of its peer group.”
“We are pleased to enter into this transaction with Blackstone, as it will deliver compelling, immediate and certain value to stockholders while positioning QTS to continue supporting customers’ expanding data center infrastructure needs,” said Philip Trahanas, Lead Director of the QTS Board of Directors.
The purchase price represents a premium of 21 percent to QTS’ closing share price as of June 4, 2021, and a 24 percent premium to the volume weighted average share price over the last 90 days. The news of the acquisition Monday caused QTS prices to jump from $64.55 per share to $78.05 at the close of day.
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