Stonepeak Buys Into American Tower’s US Data Center Business

Posted on 07/11/2022

Certain affiliated investment vehicles of Stonepeak Infrastructure Partners will acquire an ownership interest of approximately 29% in American Tower Corporation ’s U.S. data center business as part of a new strategic partnership. The partnership will be realized through an investment in common equity and mandatorily convertible preferred equity, in a transaction valued at US$ 2.5 billion, implying an enterprise value of approximately US$ 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 US$ 2.5 billion from equity and debt financing sources.

The transaction 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.

J.P. Morgan is serving as lead financial advisor to American Tower, who is also being advised by CDX Advisors. Cleary Gottlieb Steen & Hamilton LLP is serving as principal legal advisor to American Tower, who is also being advised by Sullivan & Worcester LLP with respect to certain REIT and tax matters. MUFG Bank, Ltd. is serving as sole financial advisor to Stonepeak. Sidley Austin LLP is serving as principal legal advisor to Stonepeak. The transaction is expected to close in the third quarter of 2022, subject to customary closing conditions.

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