American Tower today filed a tender offer with the U.S. Securities and Exchange Commission (SEC) by its wholly owned indirect subsidiary, Appleseed Merger Sub LLC, for all outstanding shares of the common stock of CoreSite Realty at a price of $170 per share in cash.
Additionally, CoreSite filed with the SEC a solicitation/recommendation statement on Schedule 14D-9 that includes the recommendation of the CoreSite board of directors that CoreSite stockholders accept the tender offer and tender their shares.
The tender offer is being made in connection with the Agreement and Plan of Merger announced by American Tower and CoreSite on November 15, 2021 (see separate story). Consideration for the transaction, including the assumption or repayment of CoreSite’s debt, is $10.1 billion.
The tender offer is scheduled to expire one minute after 11:59 p.m. (Eastern Time) on Monday, December 27, 2021, unless extended. A successful consummation of the tender offer will be followed by a merger to acquire any untendered shares of CoreSite for the same price payable in the tender offer.
“The transaction is expected to create a differentiated, comprehensive and interconnected communications real estate platform optimally positioned to benefit from the convergence of wireline and wireless networks amid accelerating global 5G deployments,” according to a Nov. 15 statement from American Tower.
CoreSite, which has 25 data centers, 21 cloud on-ramps and more than 32,000 interconnections in eight U.S. markets, generated $655 million in annualized revenue and $343 million in adjusted EBITDA in the third quarter this year, according to American Tower. It said that CoreSite has averaged double-digit annual revenue growth over the past five years and is led by a management team that has established a presence with cloud service providers, positioning the business for organic growth. American Tower said it expects to use its financial position to accelerate CoreSite’s development pipeline in the United States, while also evaluating the potential for international expansion in the data center business.
“The transaction is also expected to be transformative for American Tower’s mobile edge compute business in advance of the proliferation of 5G low-latency applications throughout the cloud, enterprise and network ecosystems, establishing a converged communications and computing infrastructure offering with distributed points of presence across multiple edge layers,” the Nov. 15 American Tower statement reads.
The statement also said: “With increased scale and a broadened, more comprehensive offering, American Tower and CoreSite expect the combined company to be well-positioned to address evolving customer needs through an enhanced value proposition for network and cloud providers, service integrators and enterprise customers.”