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08/16/19 Bloomberg Knowledge

CyrusOne Explores Sale After Bidder Approach


Cyrusone explores sale

CyrusOne (NASDAQ: CONE) is considering a potential sale after receiving takeover interest, according to people familiar with the matter, as digital infrastructure companies such as data center operators increasingly garner buyout interest from rivals and private buyers.

The Dallas-based company is working with an adviser to evaluate strategic options after a recent approach from at least one potential suitor, said the people, who asked to not be identified because the matter isn’t public.

A bidder group including KKR & Co., Stonepeak Infrastructure Partners and I Squared Capital is in the preliminary stages of weighing a bid for the company, said one of the people. Other potential bidders are interested too, the people said. No decision has been made and CyrusOne could opt to remain independent, they said.

CyrusOne rose as high as 16.6% on the news, its biggest gain since going public in 2013. The shares were up 11.7% to $72.79 at 11:36 a.m. in New York on Friday, giving the company a market value of about $8.2 billion.

A representative for KKR declined to comment. Representatives for Stonepeak, I Squared and CyrusOne didn’t respond to requests for comment.

Founded in 2001, CyrusOne has a network of 48 data centers serving about 1,000 customers in the U.S., U.K., Singapore and Germany, according to its annual report. It is one of at least five real estate investment trusts that specialize in data centers, which help companies safely store data. Others include Equinix Inc. and Digital Realty Trust Inc.

REIT Deals

The potential sale comes as data center REITs seek to expand globally through acquisitions to take advantage of strong demand for their services. CyrusOne acquired European data center operator Zenium Technology Partners Ltd. for $442 million last year and Digital Realty acquired Brazil’s Ascenty for about $1.8 billion. Equinix recently signed a joint venture with Singapore’s sovereign wealth fund, GIC Pte, to operate and develop data centers in Europe.

Alternative investment firms have been sizing up large deals after raising huge pools of capital dedicated to the infrastructure sector, which -- apart from digital-related assets like data centers -- also includes transportation assets, oil and gas pipelines and renewable energy projects.

KKR, Stonepeak and I Squared have worked together previously. The trio teamed up with peers including Blackstone Group Inc. to pursue Zayo Group Holdings Inc., Bloomberg reported late last year.

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