CyrusOne (NASDAQ: CONE) today announced its shareholders approved the previously announced merger pursuant to which funds managed by private equity firms KKR (KKR Global Infrastructure Investors IV and KKR Real Estate Partners Americas III) and GIP (Global Infrastructure Partners IV), will acquire all outstanding shares of common stock of the company.
At CyrusOne’s special meeting held today, KKR and GIP’s proposal to shareholders through the merger, the merger agreement, and the other transactions contemplated by the merger agreement was approved by 78.41% of the common stock outstanding and entitled to vote, and more than 99.5% of the votes cast.
As of the close of business on December 23, 2021, the record date for the special meeting, there were 129,553,316 shares of common stock of CyrusOne outstanding and entitled to vote at the special meeting. Out of this total, 101,995,210 shares of CyrusOne’s common stock, representing 78.73% of all of the issued and outstanding CyrusOne common stock entitled to vote, were represented at the special meeting.
Upon the closing of the merger, each issued and outstanding share of common stock of CyrusOne will be converted into the right to receive $90.50 in cash in a transaction valued at ~$15bn, including the assumption of debt. Subject to the satisfaction of customary closing conditions, the merger is expected to close in Q2 2022.
CyrusOne – Overview – What are Shareholders Selling to KKR and GIP Funds?
CyrusOne operates 57 data centers, representing 971 megawatts of power capacity across 5.05 million sqft of colocation space. The company’s primarily hyperscale data centers in the United States and Europe support ~1.0k customers. CyrusOne generates 50%+ of its revenue from cloud service providers (e.g., Microsoft, Google, Amazon Web Services), with contributions from social media companies (e.g., Facebook) as well.
Financial Performance – Q3 2021
In Q3 2021, CyrusOne reported revenue of $304m and adjusted EBITDA of $149m. Therefore, on an annualized basis, CyrusOne generates revenue of $1.2bn and adjusted EBITDA of $597m.
M&A Prior to Completion of KKR and GIP Take-Private
In January 2022, CyrusOne agreed to sell four existing data centers in the Houston, Texas metro area for total consideration of $670m, to DataBank Holdings, a retail colocation provider, which is 20%-owned by the balance sheet of DigitalBridge (NYSE: DBRG). Specifically, DataBank is acquiring CyrusOne’s Houston West I, II, & III, and Houston Galleria data centers.
Additionally, CyrusOne will lease back from DataBank, Houston West III’s powered shell to support a leasing deal signed in Q4 2021 with Facebook (Meta).