SAN FRANCISCO and AMSTERDAM, Oct. 29,
2019 /PRNewswire/ -- Digital Realty (NYSE: DLR) and
Interxion (NYSE: INXN) announced today they have entered into a
definitive agreement to combine their businesses to create a
leading global provider of data center, colocation and
interconnection solutions. Under the terms of the agreement,
Interxion shareholders will receive a fixed exchange ratio of
0.7067 Digital Realty shares per Interxion share. The
transaction values Interxion at approximately $93.48 per ordinary share or approximately
$8.4 billion of total enterprise
value, including assumed net debt.1 Completion of
the transaction is subject to customary closing conditions,
including approval by shareholders of Interxion and shareholders of
Digital Realty.
Transaction Delivers Key Strategic and Financial
Benefits
- Globally Expanding Connected Communities of Interest:
The combined company will extend Interxion's successful strategy of
creating and enabling valuable communities of interest in
Europe by extending it across the
combined company's global footprint. This combination will build
upon Digital Realty's successful track record of hyperscale
development and will represent an extension of the connected campus
strategy that empowers enterprise customers to leverage the right
products – from colocation to hyperscale footprints – to create
value by efficiently deploying critical infrastructure and
seamlessly connecting to a robust and growing universe of cloud
platforms and connectivity service providers. The combined company
will be uniquely positioned to meet the growing global demand from
cloud platforms, service providers and enterprises seeking
colocation, hybrid cloud and hyperscale data center solutions as IT
architectures are re-engineered to support the explosive growth of
data in modern business models.
- Complementary European Footprint and Product Offering:
Interxion's European business (currently consisting of 53 carrier-
and cloud-neutral facilities in 11 European countries and 13 metro
areas including Frankfurt,
Amsterdam, Paris and Interxion's Internet Gateway in
Marseille) is highly complementary
to Digital Realty's European footprint, given Digital Realty's
established presence in London and
Dublin. The combination will
create a leading pan-European data center presence, offering
consistent, high-quality services with low-latency access to
approximately 70% of the GDP in Europe.
- Enhances Ability to Serve Multinational Customers on a
Global Scale: Interxion's well-established relationships with
leading global cloud, digital media platform operators and
multinational enterprise customers are expected to significantly
bolster Digital Realty's existing European platform. Similarly,
Digital Realty's relationships with many of the leading cloud
platform operators and global enterprises along with its access to
low-cost capital will meaningfully extend the breadth of the
combined company's value proposition to a global customer base. The
combined company's enhanced capabilities to address and solve the
public- and hybrid-cloud architectural requirements of its global
customer base will allow it to build upon each company's current
relationships with leading global customers while also enabling it
to effectively compete in the broader target markets.
- Combined Development Capacity Provides Significant Embedded
Growth Potential: Interxion has a robust pipeline of data
center development projects currently under construction, with over
$400 million invested to date and a
total expected investment of approximately $1 billion. These projects represent roughly a
40% expansion of Interxion's standalone critical load capacity, are
significantly pre-leased and are expected to be delivered over the
next 24 months, representing a solid pipeline of potential future
growth for the combined company. In addition, the combined platform
will maintain strategic land holdings in key growth metros across
Europe, providing the potential
for significant long-term development value creation.
- Creates Substantial Anticipated Cost Efficiencies and
Financial Benefits: The size and scale of the combined company
is expected to produce a highly efficient cost structure and
industry-leading EBITDA margins. The combination of the two
companies is expected to create an opportunity to realize cost
savings. Upon closing, the transaction is expected to enhance the
combined company's long-term growth prospects and is expected to
improve its cost of and access to capital.
"This strategic and complementary transaction builds upon
Digital Realty's established foundation of serving market demand
for colocation, scale and hyperscale requirements in the Americas,
EMEA and Asia Pacific and
leverages Interxion's European colocation and interconnection
expertise, enhancing the combined company's capabilities to enable
customers to solve for the full spectrum of data center
requirements across a global platform," said Digital Realty Chief
Executive Officer A. William
Stein. "The transaction is expected to be accretive to
the long-term growth trajectory of the combined organization, and
to establish a global platform that we believe will significantly
enhance our ability to create long-term value for customers,
shareholders and employees of both companies."
"We are excited to deliver this compelling opportunity for all
our stakeholders while bolstering our ability to offer a truly
global platform to serve our customers' needs," said Interxion
Chief Executive Officer David
Ruberg. "As part of Digital Realty, stakeholders will
have the opportunity to continue to reap the benefits of the value
that we have created via the communities of interest approach in
our carrier- and cloud-neutral European data center
portfolio. They will also be able to participate in the value
created by extending our approach across Digital Realty's global
footprint, complementary customer base and significant presence in
the Americas, EMEA and Asia Pacific. We also believe our
stakeholders will benefit from Digital Realty's investment grade
balance sheet and lower cost of capital. We look forward to
working closely with Bill Stein and
the entire Digital Realty team to consummate the transaction and
combine the best of our companies to build the world's preeminent
data center provider."
Leadership, Corporate Governance and Integration
Digital Realty Chief Executive Officer A. William Stein will serve as CEO of the
combined company. Interxion Chief Executive Officer
David Ruberg will serve as the Chief
Executive of the combined company's Europe, Middle
East & Africa (EMEA)
business, which will be branded "Interxion, a Digital Realty
company" at the close of the transaction. Mr. Ruberg is
expected to transition out of the role as Chief Executive of the
EMEA business at some point within approximately one year of
completion of the transaction. Mr. Ruberg will lead the
combined company's effort to organize and execute a program to
identify and develop high-value communities of interest across the
combined company's platform. He will play a leadership role
on certain of the combined company's key global customer accounts,
bringing to bear his longstanding relationships and thought
leadership.
Digital Realty Chief Financial Officer Andrew P. Power will serve as CFO of the
combined company. Digital Realty EMEA Managing Director
Jeffrey Tapley will work jointly
with Mr. Ruberg on the integration of Interxion's and Digital
Realty's businesses. The board of directors of the combined
company will consist of nine board members designated by
Digital Realty and one board member designated by Interxion.
Laurence A. Chapman, the current
Chairman of the Digital Realty Board of Directors, will serve as
Chairman of the Board of Directors of the combined
company.
Digital Realty and Interxion employees will play a pivotal role
in the success of the combined company and will be treated
accordingly. Digital Realty and Interxion believe the
employees of the combined company will have expanded career
opportunities based on the expectations of enhanced growth
prospects for the combined company. The process of
transitioning from two separate organizations to a combined global
entity will be fair, consistent, and transparent, recognizing the
importance of preserving the rich cultural and country diversity
within the combined business.
Transaction Details
Under the terms of the definitive agreement, a subsidiary of
Digital Realty will commence a tender offer to acquire all
Interxion's issued and outstanding ordinary shares in exchange for
0.7067 shares of Digital Realty common stock for each Interxion
ordinary share (subject to a minimum tender of at least 80% of
Interxion's outstanding ordinary shares, which minimum may be
reduced to 66 2/3% by Digital Realty). Upon completion of the
transaction, Interxion shareholders will own approximately 20% of
the outstanding common stock of the combined company. Based
on Digital Realty's closing stock price of $132.28 on October 28,
2019, the transaction values Interxion at approximately
$93.48 per ordinary share, or
approximately $8.4 billion of total
enterprise value, including assumed net debt. Digital Realty
expects to refinance the Interxion debt assumed in the transaction
with a combination of investment grade corporate bonds and proceeds
from other financings.
The transaction is not subject to any financing condition.
A special meeting of Digital Realty shareholders will be convened
to approve the issuance of Digital Realty common stock in the
transaction, in accordance with New York Stock Exchange
rules. Following the close of the tender offer, in line with
Dutch market practice, Digital Realty and Interxion will effectuate
a corporate reorganization of Interxion and its subsidiaries,
resulting in Digital Realty owning 100% of Interxion's business and
interests in Interxion's subsidiaries. If less than 95% of
Interxion's ordinary shares are tendered, Interxion shareholders
who do not tender their shares in the tender offer will ultimately
receive in the corporate reorganization the same consideration of
0.7067 shares of Digital Realty common stock for each Interxion
ordinary share (without interest and subject to applicable
withholding taxes). If 95% or more of Interxion's ordinary
shares are tendered, Interxion shareholders who did not tender will
ultimately be squeezed out in accordance with a statutory Dutch
court procedure in which they will receive cash in an amount
determined under Dutch law. An extraordinary general meeting
of Interxion's shareholders will be convened in connection with the
tender offer to adopt, among other things, certain resolutions
relating to the transaction.
Interxion Chief Executive Officer David
Ruberg, who controls approximately 1.3% of Interxion's
outstanding ordinary shares, has entered into a tender and support
agreement with Digital Realty pursuant to which he has agreed,
among other things, to tender his shares in the tender offer and to
vote in favor of the resolutions relating to the transaction at the
Interxion extraordinary general meeting.
The transaction has been approved by the boards of directors of
both Digital Realty and Interxion. The transaction is
expected to close in 2020 and is subject to the approval of
Interxion and Digital Realty shareholders and other customary
closing conditions.
BofA Securities, Credit Suisse and Morgan Stanley are acting as
financial advisors and Latham & Watkins LLP and De Brauw
Blackstone Westbroek N.V. are acting as legal advisors to Digital
Realty. Guggenheim Securities is acting as financial advisor
and rendered a fairness opinion to Interxion, and Moelis &
Company also rendered a fairness opinion to Interxion.
Debevoise & Plimpton LLP and Greenberg Traurig, LLP
(Amsterdam) are acting as legal
advisors to Interxion.
Investor Conference Call
Digital Realty Chief Executive Officer A. William Stein, Digital Realty Chief Financial
Officer Andrew P. Power and
Interxion Chief Executive Officer David
Ruberg will host Digital Realty's previously scheduled
earnings call and will discuss the transaction at 2:30 p.m. PDT / 5:30 p.m.
EDT / 10:30 p.m. CET on
October 29, 2019. A transaction
presentation has been posted to the Investors section of Digital
Realty's website at: https://investor.digitalrealty.com/
To participate in the live call, investors are invited to dial
(888) 317-6003 (for domestic callers) or
(412) 317-6061 (for international callers) and reference the
conference ID # 3707672 at least five minutes prior to start
time. A live webcast of the call will be available on the
Investors section of Digital Realty's website at:
https://investor.digitalrealty.com/
Telephone and webcast replays will be available from
October 30, 2019 until November 29, 2019. The telephone replay may
be accessed by dialing (877) 344-7529 (for domestic callers) or
(412) 317-0088 (for international callers) and using the conference
ID # 10135281. The webcast replay may be accessed on Digital
Realty's website.
About Digital Realty
Digital Realty supports the data
center, colocation and interconnection strategies of customers
across the Americas, EMEA and APAC, ranging from cloud and
information technology services, communications and social
networking to financial services, manufacturing, energy, healthcare
and consumer products. To learn more about Digital Realty,
please visit digitalrealty.com or follow
us on LinkedIn, Twitter, Facebook, Instagram and YouTube.
About Interxion
Interxion (NYSE: INXN) is a leading
provider of carrier- and cloud-neutral colocation data centre
services in Europe, serving a wide
range of customers through more than 50 data centres in 11 European
countries. Interxion's uniformly designed, energy efficient
data centres offer customers extensive security and uptime for
their mission-critical applications.
With over 700 connectivity providers, 21 European Internet
exchanges, and most leading cloud and digital media platforms
across its footprint, Interxion has created connectivity, cloud,
content and finance hubs that foster growing customer communities
of interest. For more information, please visit
www.interxion.com.
For Additional Information
Andrew P. Power
Chief Financial Officer
Digital Realty
(415) 738-6500
Digital Realty Investor Relations
John J. Stewart
(415) 738-6500
InvestorRelations@digitalrealty.com
Interxion Investor Relations
Jim Huseby
(813) 644-9399
IR@interxion.com
Digital Realty Media Inquiries
John Christiansen / Scott Lindlaw
Sard Verbinnen & Co
(415) 618-8750
DigitalRealty-SVC@SARDVERB.com
Interxion Media Inquiries
Matt
Sherman / Mahmoud Siddig
Joele Frank, Wilkinson Brimmer
Katcher
(212) 355-4449
inxn-jf@joelefrank.com
Safe Harbor Statement
Additional Information and Where You Can Find It:
This communication is for information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any proxy, vote or approval
with respect to the proposed transaction or otherwise, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. In connection with the proposed transactions,
Digital Realty intends to file a Registration Statement on Form S-4
with the U.S. Securities and Exchange Commission (the "SEC"), that
will include a proxy statement of Digital Realty, which also
constitutes a prospectus of Digital Realty. After the
registration statement is declared effective by the SEC, Digital
Realty intends to mail a definitive proxy statement/prospectus to
shareholders of Digital Realty and Digital Realty intends to cause
its subsidiary to file a Tender Offer Statement on Schedule TO (the
"Schedule TO") with the SEC and soon thereafter Interxion intends
to file a Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") with respect to the tender offer. The
tender offer for the outstanding common stock of Interxion referred
to in this document has not yet commenced. The solicitation
and offer to purchase shares of Interxion's common stock will only
be made pursuant to the Schedule TO and related offer to
purchase. This material is not a substitute for the proxy
statement/prospectus, the Schedule TO, the Schedule 14D-9 or the
Registration Statement or for any other document that Digital
Realty or Interxion may file with the SEC and send to Digital
Realty's or Interxion's shareholders in connection with the
proposed transactions.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION OR DECISION WITH
RESPECT TO THE TENDER OFFER, WE URGE INVESTORS OF DIGITAL REALTY
AND INTERXION TO READ THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS, SCHEDULE TO (INCLUDING AN OFFER TO PURCHASE,
RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND
SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME, AND OTHER RELEVANT DOCUMENTS FILED BY DIGITAL REALTY AND
INTERXION WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT DIGITAL REALTY,
INTERXION AND THE PROPOSED TRANSACTIONS.
Investors will be able to obtain free copies of the Registration
Statement, proxy statement/prospectus, Schedule TO and Schedule
14D-9, as each may be amended from time to time, and other relevant
documents filed by Digital Realty and Interxion with the SEC (when
they become available) at http://www.sec.gov, the SEC's website, or
free of charge from Digital Realty's website
(https://www.digitalrealty.com) or by contacting Digital Realty's
Investor Relations Department at (415) 848-9311. These
documents are also available free of charge from Interxion's
website (https://www.interxion.com/) or by contacting Interxion's
Investor Relations Department at (813) 644-9399.
Participants in the Solicitation
Digital Realty, Interxion and their respective directors and
certain of their executive officers and employees may be deemed,
under SEC rules, to be participants in the solicitation of proxies
from Digital Realty's and Interxion's shareholders in connection
with the proposed transactions. Information regarding the
officers and directors of Digital Realty is included in its
definitive proxy statement for its 2019 annual meeting filed with
the SEC on April 1, 2019.
Information regarding the officers and directors of Interxion
and their ownership of Interxion ordinary shares is set forth in
Interxion's Annual Report on Form 20-F, which was filed with the
SEC on April 30, 2019.
Additional information regarding the persons who may be
deemed participants and their interests will be set forth in the
Registration Statement and proxy statement/prospectus and other
materials when they are filed with SEC in connection with the
proposed transactions. Free copies of these documents may be
obtained as described in the paragraphs above.
Note Regarding Forward-Looking Statements:
Digital Realty and Interxion caution that statements in this
communication that are forward-looking, and provide other than
historical information, involve risks, contingencies and
uncertainties that may impact actual results of operations of
Digital Realty, Interxion and the combined company. These
forward-looking statements include, among other things, statements
about anticipated satisfaction of closing conditions and completion
of the proposed transactions contemplated by the purchase agreement
between them. Although we believe that the expectations
reflected in those forward-looking statements are reasonable, we
can give no assurance that those expectations will prove to have
been correct. Those statements are made by using various
underlying assumptions and are subject to numerous risks,
contingencies and uncertainties, including, among others: the
ability of Digital Realty and Interxion to obtain the regulatory
and shareholder approvals necessary to complete the anticipated
combination, on the anticipated timeline or at all; the risk that a
condition to the closing of the anticipated combination may not be
satisfied, on the anticipated timeline or at all or that the
anticipated combination may fail to close; the outcome of any legal
proceedings, regulatory proceedings or enforcement matters that may
be instituted relating to the anticipated combination; the costs
incurred to consummate the anticipated combination; the possibility
that the expected synergies from the anticipated combination will
not be realized, or will not be realized within the expected time
period; difficulties related to the integration of the two
companies; disruption from the anticipated combination making it
more difficult to maintain relationships with customers, employees,
regulators or suppliers; the diversion of management time and
attention on the anticipated combination; adverse changes in the
markets in which Digital Realty and Interxion operate or credit
markets; and changes in the terms, scope or timing of contracts,
contract cancellations, and other modifications and actions by
customers and other business counterparties of Digital Realty and
Interxion. If one or more of these risks materialize, or if
underlying assumptions prove incorrect, actual results may vary
materially from those expected. You should not place undue
reliance on forward looking statements. For a more complete
discussion of these and other risk factors, please see (i) Digital
Realty's filings with the U.S. Securities and Exchange Commission
(the "SEC"), including its annual report on Form 10-K for the year
ended December 31, 2018 and
subsequent quarterly reports on Form 10-Q, and (ii) Interxion's
filings with the SEC, including its annual report on Form 20-F for
the year ended December 31, 2018 and
subsequent reports on Form 6-K. This communication reflects
the views of Digital Realty's and Interxion's management as of the
date hereof. Except to the extent required by applicable law,
Digital Realty and Interxion undertake no obligation to update or
revise any forward-looking statement.
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SOURCE Digital Realty