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DuPont Digital Realty

The $7.8 B Digital Realty Deal for DuPont Fabros

DuPont Fabros Technology based in D.C is officially a Digital Realty subsidiary. This has come to pass after the sealing of a $7.8 billion deal. The transactions were made public in the announcement made in June that revealed the terms of the proposed deal between the district based data center developer and the San Francisco Digital Realty Trust Inc.

During the announcement, the intention of bringing together the Digital Realty footprint comprising of 45 properties present in the 33 metro areas with the 12 data centers belonging to DuPont Fabros Technology was revealed. As a result of the merger, stockholders in DuPont Fabros Technology are expected to acquire 0.545 of Digital Realty shares for every single share. This move alone has raised the value of DuPont Fabros to $63.63 per share.

When the possible merger was being announced, the proposed board was to consist of 10 members from Digital Realty while two other members were to join them from DuPont Fabros. As a matter of fact, Mr. Michael Coke and John Roberts Jr. who were sitting members in the former DuPont Fabros board have been appointed to join the Digital Realty’s board of directors. Consequently, the company’s headquarters would be moved from D.C to San Francisco.

Digital Realty’s CEO Mr. William Stein said that the firm’s move to acquire DuPont Fabros Technology is strategic as it will enhance their service delivery. He added that the merger will go a long way in solidifying their blue-chip, which is their customer base. Previously, Digital Realty data centers widely spread in North America, Australia, Europe and Asia were hosting over 2,300 firms. Following the recently concluded transactions, the company will have the capacity to host more firms. This is meant to happen as DuPont Fabros brings its portfolio of 12 data centers located in Silicon Valley, North Virginia and Chicago.

According to its fact sheet, DuPont Fabros had not placed an active advert indicating its willingness to sell or merge with another company. However, they considered the request from Digital Realty that came with a clearly put down offer made by the company’s board. As soon as the written offer was received, both companies agreed to have a meeting for the shareholders which took place later in summer for their approval of the merger. It is the go-ahead by the shareholders from both companies that the deal has been sealed.

The fact sheet also revealed that the shifting of the headquarters to the West Coast may open up opportunities for some of the DuPont Fabros staff to work for Digit Realty. However, he said opportunities have not been revealed and the individuals who will be appointed.

The high revenue potential of DuPont Fabros can be traced back in 2016 when it emerged as 11th top traded among the real estate investments in the larger Washington region. The firm generated revenue about $528.7 million. The firm was founded back in 2007 with a staff capacity of 122.

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