American Tower Corporation (NYSE: AMT) watched its shares decline in early Monday trading, as Stonepeak, a leading alternative investment firm specializing in infrastructure and real assets, today announced it will acquire an ownership interest of approximately 29% in American Tower’s U.S. data center business as part of a new long-term strategic partnership.
The partnership will be realized through an investment in common equity and mandatorily convertible preferred equity, in a transaction valued at $2.5 billion, implying an enterprise value of approximately $10.5 billion for the U.S. data center business (held as subsidiaries of American Tower).
Pursuant to the related partnership agreement, American Tower will retain managerial and operational control, as well as day-to-day oversight of its U.S. data center business, and Stonepeak will obtain certain governance rights. Stonepeak is making its investment as part of its core infrastructure strategy.
The affiliated investment vehicles have received equity and debt commitment letters in the amount of $2.5 billion from equity and debt financing sources.
The transaction, according to Monday morning’s press release, “will position American Tower and Stonepeak to mutually benefit from the demand for low-latency, hybrid IT solutions and agile interconnection across the platform’s data center campuses, which are strategically located in key U.S. metro areas.
“The platform’s data center portfolio consists of 27 data centers in 10 U.S. markets, more than 450 networks, 23 native cloud on-ramps and over 35,000 interconnections.”
AMT shares dropped 17 cents to $254.84.
