In other data center merger news, QTS Realty Trust has found itself an inorganic target. Yesterday they announced an agreement to acquire Carpathia Hosting for $326M, looking to move deeper into cloud-based services.
Virginia-based Carpathia offers hybrid cloud services out of data centers in 9 markets around the world. In particular, they do a fair amount of federal contract business, which will combine nicely with QTS and its huge facility in Richmond, VA.
QTS expects to add on $90M in revenue, boosting their overall number well north of $300M, and $32M in adjusted EBITDA annually from the combination with another $2M in synergies that would start to kick in next year. They therefore peg the deal at 9.6 times 2015 annualized adjusted EBITDA with synergies included. The purchase price of $326M is in the form of $290M in cash plus the assumption of $36M in capital lease obligations.
The deal is expected to close sometime this summer. Carpathia's CEO Peter Weber will be joining QTS as Chief Product Officer, and other executives will also be making the switch.