Digital Realty and Interxion agreed to a merger that would create a global provider of data center, colocation and interconnection solutions. Under the deal, Interxion shareholders will receive a fixed exchange ratio of 0.7067 Digital Realty shares per Interxion share. The transaction values Interxion at approximately $93.48 per ordinary share or approximately $8.4 billion of total enterprise value, including assumed net debt.
Interxion’s European business currently consists of 53 carrier- and cloud-neutral facilities in 11 European countries and 13 metro areas including Frankfurt, Amsterdam, Paris and Interxion’s Internet Gateway in Marseille. Its network reaches 700 connectivity providers, 21 European Internet exchanges, and most leading cloud and digital media platforms. Interxion has a robust pipeline of data center development projects currently under construction, with over $400 million invested to date and a total expected investment of approximately $1 billion. These projects represent roughly a 40% expansion of Interxion’s standalone critical load capacity, are significantly pre-leased and are expected to be delivered over the next 24 months, representing a solid pipeline of potential future growth for the combined company.
The companies said their combination will build upon Digital Realty’s successful track record of hyperscale development and will represent an extension of the connected campus strategy that empowers enterprise customers to leverage the right products – from colocation to hyperscale footprints – to create value by efficiently deploying
In Europe, Digital Realty has an established presence in Amsterdam, Frankfurt, London and Dublin. On a global basis, Digital Realty has 220 data centers in 35 top metropolitan areas,
The companies also noted that the merger will provide access to additional capital for investment.
“This strategic and complementary transaction builds upon Digital Realty’s established foundation of serving market demand for colocation, scale and hyperscale requirements in the Americas, EMEA and Asia Pacific and leverages Interxion’s European colocation and interconnection expertise, enhancing the combined company’s capabilities to enable customers to solve for the full spectrum of data center requirements across a global platform,” said Digital Realty Chief Executive Officer A. William Stein. “The transaction is expected to be accretive to the long-term growth trajectory of the combined organization, and to establish a global platform that we believe will significantly enhance our ability to create long-term value for customers, shareholders and employees of both companies.”
“We are excited to deliver this compelling opportunity for all our stakeholders while bolstering our ability to offer a truly global platform to serve our customers’ needs,” said Interxion Chief Executive Officer David Ruberg. “As part of Digital Realty, stakeholders will have the opportunity to continue to reap the benefits of the value that we have created via the communities of interest approach in our carrier- and cloud-neutral European data center portfolio. They will also be able to participate in the value created by extending our approach across Digital Realty’s global footprint, complementary customer base and significant presence in the Americas, EMEA and Asia Pacific. We also believe our stakeholders will benefit from Digital Realty’s investment grade balance sheet and lower cost of capital. We look forward to working closely with Bill Stein and the entire Digital Realty team to consummate the transaction and combine the best of our companies to build the world’s preeminent data center provider.”
Additionally:
- Digital Realty CEO A. William Stein will serve as CEO of the combined company
- Digital Realty CFO Andrew P. Power will serve as CFO of the combined company
- Interxion CEO David Ruberg will serve as the Chief Executive of the combined
company’s Europe, Middle East & Africa (EMEA) business, which will be branded
“Interxion, a Digital Realty company” at the close of the transaction
Interxion sees continued favourable demand for European data center services
Interxion, a leading European provider of carrier and cloud-neutral colocation data centre services, reported Q2 revenue of €158.5 million, up 14% from the same period last year. Net income increased by €8.0 million to €8.6 million (2Q 2018: €0.6 million). Diluted earnings per share increased by €0.11 to €0.12 (2Q 2018: €0.01). Capital expenditure, including intangible assets(2), were €123.5 million (2Q 2018: €120.5 million).
Some operating highlights:
- Equipped space increased by 6,500 square metres (“sqm”) during the quarter to 154,800 sqm metres.
- Revenue generating space increased by 2,600 sqm during the quarter to 121,600 sqm.
- Utilisation rate at the end of the quarter was 79%.
During the second quarter, Interxion completed the following capacity additions:
- 2,000 sqm in Vienna;
- 1,300 sqm in Madrid;
- 1,100 sqm in Marseille;
- 800 sqm in Stockholm;
- 600 sqm in London;
- 400 sqm in Paris; and
- 300 sqm in Dusseldorf.
“As reflected in the solid second quarter results, Interxion continues to experience favourable demand, driven primarily by the cloud and content platform providers,” said David Ruberg, Interxion’s Chief Executive Officer. “In response to customer demand and orders, we are announcing today incremental investments in Frankfurt, Paris, Marseille and Stockholm. Our recent equity issuance and credit rating upgrade support our ongoing expansion activity, with a focus on sustaining our attractive returns.”
