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American Tower (AMT) Closes Acquisition of CoreSite Realty

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American Tower Corporation AMT has announced the completion of the acquisition of CoreSite Realty Corporation. This was accomplished through a merger of one of its wholly owned subsidiaries with and into CoreSite.

Initially, the transaction is expected to be modestly accretive to American Tower’s adjusted FFO per share but over time it is likely to be increasingly accretive.

Amid acceleration in 5G deployments, and wireless and wireline convergence, this transaction offers American Tower the opportunity to capitalize on CoreSite’s highly interconnected data center facilities and critical cloud on-ramps. Along with this recurring growth, the company will have the capacity to boost its current tower real estate’s value through the emerging edge compute prospects.

The closing, funded by borrowings under American Tower’s revolving credit facilities and term loans, follows the completion of its prior disclosed tender offer for all CoreSite’s outstanding shares of common stock.

According to American Tower’s November press release, AMT was slated to acquire CoreSite for $170.00 per share in cash. Including assumption and/or repayment of CoreSite’s existing debt at closing, the total consideration for the transaction amounted to roughly $10.1 billion.

As of Sep 30, 2021, CoreSite had 25 data centers, 21 cloud on-ramps and more than 32,000 interconnections in eight major U.S. markets. In the third quarter of 2021, this portfolio helped the company generate annualized revenues and adjusted EBITDA of $655 million and $343 million, respectively.

Over the past five years, CoreSite has averaged double-digit annual revenue growth, making the buyout a strategic fit for American Tower. It is also expected to significantly increase its scale.

Shares of this Zacks Rank #2 (Buy) company have appreciated 28.5% compared with its industry's 29.7% growth so far in the year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Other Key Picks

Some other key picks from the REIT sector include Prologis PLD, Extra Space Storage Inc. EXR and Rexford Industrial Realty REXR.

Prologis carries a Zacks Rank of 2 at present. Prologis’ 2021 FFO per share is expected to increase 8.4% year over year.

The Zacks Consensus Estimate for PLD’s 2021 FFO per share has been revised marginally upward in two months.

Extra Space Storage holds a Zacks Rank of 2 at present. 2021 FFO per share for Extra Space Storage is expected to increase 29.9% year over year.

The Zacks Consensus Estimate for EXR’s 2021 FFO per share has been revised 2.1% upward in a month.

The Zacks Consensus Estimate for Rexford Industrial’s ongoing-year FFO per share has moved 1.2% north to $1.63 over the past two months.

The Zacks Consensus Estimate for Rexford Industrial’s 2021 FFO per share suggests an increase of 23.5% year over year. Currently, REXR carries a Zacks Rank of 2.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.


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American Tower Corporation (AMT) : Free Stock Analysis Report

Prologis, Inc. (PLD) : Free Stock Analysis Report

Extra Space Storage Inc (EXR) : Free Stock Analysis Report

Rexford Industrial Realty, Inc. (REXR) : Free Stock Analysis Report

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