Digital Realty Deal a Strategic Expansion

Digital Realty Trust today paid $7.6 billion in stock to acquire 12 existing DuPont Fabros data centers and six other development projects and some real estate, with most of those assets focused in the key areas of Northern Virginia, Chicago and Silicon Valley. The two companies will merge and the combined entity will have 163 properties across 33 global metropolitan areas.

For Digital Realty Trust Inc., the merger substantially increases its presence in those three key markets and its role as a data center operator to hyperscale companies while for DuPont Fabros, becoming part of a larger company reduces its dependence on a small set of powerful customers, according to the company's announcement.

DuPont Fabros shareholders will receive just over half-a-share of Digital Realty stock (.545) for every share of their existing DuPont stock.

In addition to purpose-built facilities in key strategic growth markets, DuPont Fabros brings a significant blue-chip customer base. According to the two companies, investment grade or equivalent customers will represent more than 50% of total revenue, post-merger.

Digital Realty thus enhances its status in the hyperscale data center world but also is positioned to continue growth in delivering cloud-based services to enterprises.

— Carol Wilson, Editor-at-Large, Light Reading

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