US data centre owner and operator QTS Realty Trust has launched an initial public offering to raise US$300m.
The Kansas-based company plans to sell an undetermined amount of its shares in Class A stock on the NYSE. QTS, held by private equity firm…
US data centre owner and operator QTS Realty Trust has launched an initial public offering to raise US$300m.
The Kansas-based company plans to sell an undetermined amount of its shares in Class A stock on the NYSE. QTS, held by private equity firm General Atlantic, owns and operates 10 data centres offering services to business and government clients, including wholesale services to telecommunication providers.
Goldman Sachs and Jefferies will manage the float, which would see QTS operate as a publicly-traded real estate investment trust (REIT), according to a prospectus filed with the SEC. REITS are given special tax considerations and usually offer investors high yields as they are obliged to distribute a minimum of 90% of their taxable profits as dividends.
BofA Merrill Lynch, Deutsche Bank, KeyBanc Capital Markets and Morgan Stanley are also bookrunners on the offering.
QTS is marketing the flotation as an opportunity to invest in a high-growth sector. The North American data centre market is estimated to grow from US$8.2bn in 2011 to US$13.7bn in 2014, QTS said citing findings from 451 Research. That represents a compound annual growth rate of 19%, the company added.
Rather than mark the beginning of an exit strategy for General Atlantic, the firm stated that net proceeds will go towards paying off a revolver, fund redevelopment costs, be used for future acquisitions and for general corporate purposes.
The company generated US$84m in revenues over the first six months of the year and a net income of US$7m.
QTS’ planned IPO bears similarities to the CyrusOne listing in January. US regional telco Cincinnati Bell spun-off its data centre subsidiary raising US$360m by selling a 31% stake. The shares priced high – at US$19 rather than in the US$16 to US$18 range – and climbed above US$24, but have now fallen back to US$18. CyrusOne has REIT status and trades on the Nasdaq.
