Stonepeak to buy 29% stake in American Tower’s US data center business

American Tower will retain managerial and operational control of the data center business

American Tower Corporation and Stonepeak, an investment firm specializing in infrastructure and real assets, announced that Stonepeak, on behalf of certain affiliated investment vehicles, will acquire an ownership interest of approximately 29% in American Tower’s U.S. data center business as part of a new long-term strategic partnership.

The partnership will be realized through an investment in common equity and mandatorily convertible preferred equity, in a transaction valued at $2.5 billion, implying an enterprise value of approximately $10.5 billion for the U.S. data center business.

Under the terms of the deal, 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.

In a release, American Tower said that both firms will benefit from the demand for low-latency, hybrid IT solutions and agile interconnection across the platform’s data center campuses, which are 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.

Tom Bartlett, American Tower’s president and CEO, said: “We are pleased to partner with Stonepeak in our U.S. data center business, where we expect to create value through growth in our highly interconnected, cloud on-ramp rich portfolio of data center assets. In Stonepeak, we’ve found a like-minded partner, with deep communications infrastructure experience and a long-term investment philosophy that aligns with the principles of American Tower and our longer-term strategy in the data centers segment. While this transaction supports the equity financing component for our previously completed CoreSite acquisition, it also creates a platform through which growth opportunities can be strategically evaluated and financed, with American Tower and Stonepeak committed to executing on opportunities as the 5G ecosystem continues to develop.”

“American Tower has established one of the premier network dense, interconnection-focused data center platforms in the U.S. through CoreSite and previous acquisitions, which we view as a great fit for our core infrastructure strategy. The platform is strategically positioned to be at the forefront of the continued shift from a traditional centralized infrastructure model to a cloud-based, connected and distributed digital infrastructure model and we are excited to partner with the American Tower team to help accelerate investment behind this trend in the years to come,” said Andrew Thomas, Managing Director and Co-Head of Communications at Stonepeak.

In November 2021, American Tower Corporation and CoreSite Realty Corporation announced that they had entered into a definitive agreement through which American Tower will acquire CoreSite for nearly $10.1 billion.

American Tower previously said that the CoreSite acquisition will 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.”

As of Q3, 2021, CoreSite had 25 data centers, 21 cloud on-ramps and over 32,000 interconnections in eight major U.S. markets.

American Tower is an owner, operator and developer of multitenant communications real estate with a portfolio of approximately 221,000 communications sites.

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