The combined company will extend Interxion’s successful strategy of creating and enabling valuable communities of interest in Europe by extending it across the combined company’s global footprint. This combination will build upon Digital Realty’s successful track record of hyperscale development and will represent an extension of the connected campus strategy that empowers enterprise customers to leverage the right products – from colocation to hyperscale footprints – to create value by efficiently deploying critical infrastructure and seamlessly connecting to a robust and growing universe of cloud platforms and connectivity service providers. The combined company will be uniquely positioned to meet the growing global demand from cloud platforms, service providers and enterprises seeking colocation, hybrid cloud and hyperscale data center solutions as IT architectures are re-engineered to support the explosive growth of data in modern business models.
Interxion’s European business (currently consisting of 53 carrier- and cloud-neutral facilities in 11 European countries and 13 metro areas including Frankfurt, Amsterdam, Paris and Interxion’s Internet Gateway in Marseille) is highly complementary to Digital Realty’s European footprint, given Digital Realty’s established presence in London and Dublin. The combination will create a leading pan-European data center presence, offering consistent, high-quality services with low-latency access to approximately 70% of the GDP in Europe.
Interxion’s well-established relationships with leading global cloud, digital media platform operators and multinational enterprise customers are expected to significantly bolster Digital Realty’s existing European platform. Similarly, Digital Realty’s relationships with many of the leading cloud platform operators and global enterprises along with its access to low-cost capital will meaningfully extend the breadth of the combined company’s value proposition to a global customer base. The combined company’s enhanced capabilities to address and solve the public- and hybrid-cloud architectural requirements of its global customer base will allow it to build upon each company’s current relationships with leading global customers while also enabling it to effectively compete in the broader target markets.
Interxion has a robust pipeline of data center development projects currently under construction, with over $400 Million USD invested to date and a total expected investment of approximately $1 Billion USD. These projects represent roughly a 40% expansion of Interxion’s standalone critical load capacity, are significantly pre-leased and are expected to be delivered over the next 24 months, representing a solid pipeline of potential future growth for the combined company. In addition, the combined platform will maintain strategic land holdings in key growth metros across Europe, providing the potential for significant long-term development value creation.
The size and scale of the combined company is expected to produce a highly efficient cost structure and industry-leading EBITDA margins. The combination of the two companies is expected to create an opportunity to realize cost savings. Upon closing, the transaction is expected to enhance the combined company’s long-term growth prospects and is expected to improve its cost of and access to capital.
“This strategic and complementary transaction builds upon Digital Realty’s established foundation of serving market demand for colocation, scale and hyperscale requirements in the Americas, EMEA and Asia Pacific and leverages Interxion’s European colocation and interconnection expertise, enhancing the combined company’s capabilities to enable customers to solve for the full spectrum of data center requirements across a global platform,” said Digital Realty Chief Executive Officer A. William Stein. “The transaction is expected to be accretive to the long-term growth trajectory of the combined organization, and to establish a global platform that we believe will significantly enhance our ability to create long-term value for customers, shareholders and employees of both companies.”
“We are excited to deliver this compelling opportunity for all our stakeholders while bolstering our ability to offer a truly global platform to serve our customers’ needs,” said Interxion Chief Executive Officer David Ruberg. “As part of Digital Realty, stakeholders will have the opportunity to continue to reap the benefits of the value that we have created via the communities of interest approach in our carrier- and cloud-neutral European data center portfolio. They will also be able to participate in the value created by extending our approach across Digital Realty’s global footprint, complementary customer base and significant presence in the Americas, EMEA and Asia Pacific. We also believe our stakeholders will benefit from Digital Realty’s investment grade balance sheet and lower cost of capital. We look forward to working closely with Bill Stein and the entire Digital Realty team to consummate the transaction and combine the best of our companies to build the world’s preeminent data center provider.”
Digital Realty Chief Executive Officer A. William Stein will serve as CEO of the combined company. Interxion Chief Executive Officer David Ruberg will serve as the Chief Executive of the combined company’s Europe, Middle East & Africa (EMEA) business, which will be branded “Interxion, a Digital Realty company” at the close of the transaction. Mr. Ruberg is expected to transition out of the role as Chief Executive of the EMEA business at some point within approximately one year of completion of the transaction. Mr. Ruberg will lead the combined company’s effort to organize and execute a program to identify and develop high-value communities of interest across the combined company’s platform. He will play a leadership role on certain of the combined company’s key global customer accounts, bringing to bear his longstanding relationships and thought leadership.
Digital Realty Chief Financial Officer Andrew P. Power will serve as CFO of the combined company. Digital Realty EMEA Managing Director Jeffrey Tapley will work jointly with Mr. Ruberg on the integration of Interxion’s and Digital Realty’s businesses. The board of directors of the combined company will consist of nine board members designated by Digital Realty and one board member designated by Interxion. Laurence A. Chapman, the current Chairman of the Digital Realty Board of Directors, will serve as Chairman of the Board of Directors of the combined company.
Digital Realty and Interxion employees will play a pivotal role in the success of the combined company and will be treated accordingly. Digital Realty and Interxion believe the employees of the combined company will have expanded career opportunities based on the expectations of enhanced growth prospects for the combined company. The process of transitioning from two separate organizations to a combined global entity will be fair, consistent, and transparent, recognizing the importance of preserving the rich cultural and country diversity within the combined business.
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