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American Tower Buying CoreSite ‘To Lead In The 5G World’

American Tower is acquiring CoreSite and its 25 data centers for $10.1 billion in a move to create a new communications platform to drive 5G and edge computing deployments.

American Tower is looking to shake up the U.S. data center market by acquiring CoreSite and its 25 data centers for $10.1 billion with plans to create a “differentiated” communications platform to accelerate global 5G deployments.

American Tower CEO Tom Bartlett said the acquisition of CoreSite will elevate his company into a 5G world leader as cloud-based, global distributed digital transformation takes shape. The merger brings together American Tower’s wireless connectivity at the mobile edge and CoreSite’s interconnected data centers at the core edge to create an extended edge for customers that will seamlessly support high-performance, low-latency applications.

“We expect the combination of our leading global distributed real estate portfolio and CoreSite’s high-quality, interconnection-focused data center business to help position American Tower to lead in the 5G world,” said Bartlett. “As the convergence of wireless and wireline networks accelerates and classes of communications infrastructure further align, we anticipate the emergence of attractive value creation opportunities within the digital infrastructure ecosystem.”

The news comes the same day as fellow data center real estate standout CyrusOne unveiled its plan to be acquired by a pair of private equity firms for $15 billion.

[Related: CyrusOne To Be Acquired, Taken Private By KKR, GIP For $15B]

American Tower’s $10.1 billion acquisition of Denver-based CoreSite at $170 per share is expected to close by the end of 2021.

CoreSite’s stock is trading up 2 percentMonday at $170.60 per share. American Tower’s stock is down 3 percent Monday, trading at $263.32 per share.

The deal will transform American Tower’s mobile edge compute business ahead of the proliferation of 5G low-latency applications throughout the cloud, enterprise and network ecosystems, establishing a converged communications and computing infrastructure offering with distributed points of presence across multiple edge layers, said the two companies in joint statement.

Boston-based American Tower is an independent owner, operator and developer of multitenant communications real estate with a portfolio of approximately 219,000 communications sites. The new combined company will look to address evolving customer needs through a newly enhanced value proposition for network and cloud providers, service integrators and enterprise customers.

CoreSite CEO Paul Szurek said his company will “expand” American Tower’s communications infrastructure ecosystem and accelerate its edge computing strategy.

“The combined company will be ideally positioned to address the growing need for convergence between mobile network providers, cloud service providers, and other digital platforms as 5G deployments emerge and evolve,” said Szurek in a statement. “We expect the enhanced scale and further geographic reach to provide a platform for the combined company to accelerate its growth trajectory and expand into additional U.S. metro areas, as well as internationally, leveraging American Tower’s extensive presence across the globe,”

CoreSite operates 25 data centers, 21 cloud on-ramps and over 32,000 interconnections in eight major U.S. markets. The company generated revenue of $164 million during its recent third fiscal quarter 2021, representing an increase of 6 percent year over year.

Under the agreement, American Tower will commence a tender offer for all of the shares of common stock of CoreSite, followed by a merger to acquire any untendered shares for the same price payable in the tender offer.

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