Raises $220
million of net proceeds for Digital Realty
Strengthens Digital Core REIT's customer
credit profile and raises $160
million of proceeds
AUSTIN,
Texas, Nov. 1, 2023 /PRNewswire/ -- Digital
Realty (NYSE: DLR), the largest global provider of cloud- and
carrier-neutral data center, colocation and interconnection
solutions, announced today definitive agreements with Brookfield
Infrastructure Partners L.P. and its institutional partners
("Brookfield"), Cyxtera Technologies ("Cyxtera") and Digital Core
REIT that successfully resolves the relationships with
Cyxtera. These agreements were completed in conjunction with
Brookfield's announced agreement to acquire Cyxtera, pursuant to
its Plan of Reorganization under its Chapter 11 proceedings and
remain subject to bankruptcy court and regulatory approval, and
include:
- Brookfield to acquire Digital Realty's interest in four data
centers for approximately $275
million.
- Digital Realty to redeploy $55
million to buy out Cyxtera's leases in three colocation data
centers in Singapore and
Frankfurt.
- Digital Realty to use $220
million of remaining net proceeds to repay debt and fund
development.
- Brookfield to assume the leases on three facilities previously
leased to Cyxtera and amend the leases on three additional data
centers in New Jersey and
Los Angeles, accelerating the
expiration date to September
2024.
- Brookfield has granted Digital Realty a purchase option to
acquire a colocation data center outside of London, in the Slough Trading Estate.
In aggregate, these agreements are expected to result in
approximately $0.02 per share of
annualized Core Funds from Operations (CFFO) dilution in the year
following the transaction close, with upside anticipated in year
two and beyond. The transactions are anticipated to close
simultaneously in early 2024.
"We are pleased to have worked with Digital Core REIT and
Brookfield to successfully resolve our relationship with
Cyxtera. This agreement mitigates the financial impact
related to their bankruptcy, while also enhancing our financial
position, and demonstrating our commitment to and sponsorship of
Digital Core REIT," said Digital Realty Chief Investment Officer
Greg Wright. "Digital Realty will
benefit from an improved overall customer credit profile,
additional capital to fund new investment, and be better positioned
to deliver sustainable value to all of our stakeholders."
Separately, Digital Core REIT today announced entry into
agreements that, among other things, will generate $160 million of proceeds.
"By partnering with our sponsor, Digital Core REIT realized a
comprehensive resolution to our relationship with our
second-largest customer," said Digital Core REIT CEO John Stewart. "In the process, we were
able to remain insulated against a broader financial impact, while
improving our customer credit quality with approximately 85% of our
annualized rent coming from investment grade customers and
positioning our balance sheet to execute on our strategy, through
$160 million of asset sales at
attractive valuations."
Weil, Gotshal & Manges LLP served as legal advisor, while
Evercore served as financial advisor to Digital Realty on the
transaction.
About Digital Realty
Digital Realty brings companies and data together by delivering
the full spectrum of data center, colocation and interconnection
solutions. PlatformDIGITAL®, the company's global data center
platform, provides customers with a secure data meeting place and a
proven Pervasive Datacenter Architecture (PDx®) solution
methodology for powering innovation and efficiently managing Data
Gravity challenges. Digital Realty gives its customers access to
the connected data communities that matter to them with a global
data center footprint of 300+ facilities in 50+ metros across +25
countries on six continents. To learn more about Digital Realty,
please visit digitalrealty.com or follow us on
LinkedIn and X.
For Additional Information
Investor Relations
Jordan Sadler / Jim Huseby
Digital Realty
+1 737 281 0101
InvestorRelations@digitalrealty.com
Media Contacts
Helen Bleasdale
Digital Realty
+1 737 267 6822
hcbleasdale@digitalrealty.com
Safe Harbor Statement
This press release contains forward-looking statements which are
based on current expectations, forecasts and assumptions that
involve risks and uncertainties that could cause actual outcomes
and results to differ materially, including statements related to
Cyxtera's bankruptcy, acquisition and related transactions,
expected cash flow, impact on Digital Core REIT's outlook and the
related impact on Digital Realty and its outlook. For a list and
description of risks and uncertainties, see the reports and other
filings by the company with the U.S. Securities and Exchange
Commission. The company disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/digital-realty-successfully-resolves-relationship-with-cyxtera-301973797.html
SOURCE Digital Realty
