Digital Realty Trust Inc. and DuPont Fabros Technology Inc. entered into a definitive agreement to merge in an all-stock transaction valued at approximately $7.6 billion in enterprise value.
Under the terms of the agreement, DuPont Fabros shareholders will receive a fixed exchange ratio of 0.545 Digital Realty shares per DuPont Fabros share. The enterprise value includes $1.6 billion of assumed debt, excluding transaction costs. A fully committed bridge loan facility from BofA Merrill Lynch and Citigroup has already been obtained by Digital Realty to finance the transaction, if needed.
The merger is expected to realize as much as $18 million of annualized overhead savings. Following completion, the deal is anticipated to be immediately accretive to financial metrics.
While the transaction has been unanimously approved by the boards of directors of both companies, closing of the merger deal, which is subject to the approval of the companies' shareholders, is slated to take place in the second half.
BofA Merrill Lynch and Citigroup are serving as financial advisers and Latham & Watkins LLP is acting as legal adviser to Digital Realty, while Goldman Sachs & Co. LLC is acting as DuPont Fabros' financial adviser and Hogan Lovells US LLP as legal adviser.