American Tower Corp. has agreed to buy CoreSite Realty Corp., valuing the data-center real estate investment trust at an enterprise value of about $10.1 billion including debt.
The offer of $170 a share is a 2% premium to CoreSite’s close on Friday, when it rose 2.3% to $166.59, giving the company a market value of about $8.4 billion. American Tower has a market capitalization of about $124 billion.
“We are in the early stages of a cloud-based, connected and globally distributed digital transformation that will evolve over the next decade and beyond,” said Tom Bartlett, American Tower’s Chief Executive Officer, in a statement announcing the deal.
The acquisition comes amid steady consolidation among REITs that manage data centers, which provide critical infrastructure for companies big in cloud computing such as Amazon.com Inc., Salesforce.com Inc. and Alphabet Inc.
Some data center REITs been pairing up to add scale — and pricing power — to better serve their largest and most critical tenants. They also see more growth on the horizon as demand for data infrastructure keeps rising.
Real-estate investing giant Blackstone Inc. agreed to take data-center operator QTS Realty Trust Inc. private in a $6.7 billion deal in June, in part to gain exposure to a hot sector.
CoreSite operates 24 data centers in major urban hubs including Boston, Chicago, New York, Miami and Los Angeles, according to its website. Unlike most REITs that earn almost all of their income from leasing, CoreSite also makes money from power and interconnection services it supplies to tenants.