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Digital Realty Trust to buy Telx in $1.886 billion transaction

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Staff writer ▼ | July 14, 2015
Digital Realty Trust will acquire Telx, a provider of data center colocation, interconnection and cloud enablement solutions, from private equity firms ABRY Partners and Berkshire Partners in a transaction valued at $1.886 billion.
Telx
Acquisition   Extensive interconnection ecosystem sold
The combination is expected to double Digital Realty's footprint in the rapidly-growing colocation business, as well as provide Digital Realty customers access to a leading interconnection platform.

Telx's extensive interconnection ecosystem enables the exchange of information between communications service providers, enterprises, content providers and other entities with low latency and diverse connectivity across a global network and is expected to provide Digital Realty an opportunity for future growth.

As of March 31, 2015, Telx managed 1.3 million square feet of data center space operating out of 20 facilities across the country, of which two are Telx-owned, 11 are leased from Digital Realty, one is partially sub-leased from Digital Realty and an unrelated third party, and six are leased from third parties.

In connection with the definitive agreement, Digital Realty received a commitment from a syndicate of lenders for a $1.850 billion unsecured term loan bridge facility, the proceeds of which will be available for use, if necessary, to fund a portion of the acquisition of Telx.

Borrowings, if any, under the bridge facility will bear interest at a rate based, at the borrower's option, on LIBOR or a Base Rate (as defined in the commitment papers), in each case plus an applicable margin based on Digital Realty 's credit rating, and the facility will mature 364 days after the closing date of the acquisition of Telx.

The transaction is expected to close later in the year and is subject to customary closing conditions. The transaction is expected to be accretive to 2016 financial metrics.


 

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