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Digital Realty to buy DuPont Fabros in $7.6 billion deal

  • Digital Realty Trust said it would buy DuPont Fabros Technology for an enterprise value of about $7.6 billion.
  • Based on Digital Realty's Thursday close, the offer is a premium of 14.9 percent to DuPont Fabros' close.

Digital Realty Trust said it would buy fellow data center operator DuPont Fabros Technology for an enterprise value of about $7.6 billion, doubling down on efforts to meet the growing needs of cloud-based service providers.

DuPont Fabros shareholders will receive a fixed exchange ratio of 0.545 Digital Realty shares per share held, the companies said on Friday.

Based on Digital Realty's Thursday close, the offer is worth $63.60 per share, a premium of 14.9 percent to DuPont Fabros' close.

DuPont Fabros' shares were up nearly 13 percent in light premarket trading, while Digital Realty's shares were up 4 percent at $121.57.

The deal has an equity value of about $4.95 billion based on DuPont Fabros' 77.8 million shares outstanding as of April 2, according to Thomson Reuters data.

Washington-based DuPont Fabros operates 12 data centers in three major U.S. markets and Canada, while Digital Realty operates 156 data centers globally.

The deal has the potential to realize up to $18 million of annualized overhead savings, resulting from both companies' complementary business operations, Digital Realty Chief Executive William Stein said in a statement.

Digital Realty said it had a fully committed bridge loan facility from Bank of America/Merrill Lynch and Citigroup to finance the deal.

Bank of America/Merrill Lynch and Citigroup are Digital Realty's financial advisers while Goldman Sachs is advising DuPont Fabros.