Sullivan & Cromwell LLP and Eversheds Sutherland LLP served as legal advisors to CyrusOne in connection with the transaction. RBC Capital Markets, LLC served as exclusive financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Charles Russell Speechlys LLP served as legal advisors to Quantum and Zenium.
CyrusOne Inc. (“CyrusOne”) (NASDAQ:CONE), a premier global data center REIT, today announced the execution of a definitive agreement with Quantum Strategic Partners Ltd. (“Quantum”), a private investment fund managed by Soros Fund Management LLC and certain other sellers named therein, to purchase Zenium Data Centers (“Zenium”), a leading hyperscale data center provider in Europe with four properties in London and Frankfurt, the continent’s two largest data center markets. The purchase price is $442 million, reflecting a multiple of 18 times expected annualized Adjusted EBITDA of approximately $25 million from both commenced and signed but not yet billing leases. CyrusOne will also reimburse Zenium for capital expenditures between signing and closing. The transaction is expected to close in the first quarter of 2018, subject to the fulfillment of customary closing conditions including applicable regulatory approvals.
Zenium is a leading European large-scale data center developer and operator with four best-in-class data centers serving London and Frankfurt, the two largest data center markets in Europe. Taking into account leases signed but not yet billing, the company has approximately $40 million in annualized contracted GAAP revenue, excluding estimates for pass-through power, representing approximately $25 million in expected annualized Adjusted EBITDA. All signed contracts will have commenced by year-end 2018. Additionally, Zenium has a robust sales funnel, including several late-stage transactions expected to be signed in the coming months.
CyrusOne has the option to assume approximately $65 million of debt currently outstanding under two existing credit facilities (denominated in GBP and EUR), with total capacity of approximately $185 million. If the Company assumes the debt, the balance of the purchase price will be financed through capacity under its $1.1 billion revolving credit facility, which is fully undrawn. If CyrusOne does not assume the debt, the full amount of the purchase price will be financed through capacity under its revolving credit facility.
Paul, Weiss is representing Quantum Strategic Partners Ltd. with a team including Bruce Gutenplan (Picture), David Carmona and David Harris (M&A) and David Sicular (Tax).
Involved fees earner: Bruce Gutenplan – Paul Weiss Rifkind Wharton & Garrison; David Carmona – Paul Weiss Rifkind Wharton & Garrison; David Harris – Paul Weiss Rifkind Wharton & Garrison; David Sicular – Paul Weiss Rifkind Wharton & Garrison;
Law Firms: Paul Weiss Rifkind Wharton & Garrison;
Clients: Quantum Strategic Partners Ltd.;