Another public internet infrastructure company may go private before long. The data center REIT CyrusOne said late last week that it is considering a sale after receiving interest from multiple parties.
The private equity consortium making the most direct approach is said to include KKR, Stonepeak, and I-Squared. That's a team we have seen before, specifically during the Zayo sale process. They didn't win that one, but clearly it wasn't the only item on their agenda.
The bottom line is that private equity of various flavors has a greater appreciation for internet infrastructure assets overall than the public markets do. It's a dynamic that is especially pronounced when it comes to fiber, but it does extend to data centers as well to an extent.
That being said, no deal is actually on the table yet here and CyrusOne could decide not to do anything. We haven't seen one of the big US data center REITs actually go private thus far, but if CyrusOne does find a buyer that will obviously change. The markets are taking the possibility seriously, as the stock price surged 8% on Friday in response.
CyrusOne operates some 45 data centers in 10 US markets plus Frankfurt, London, and Singapore. The company did $251.5M in revenue in Q2, and it's stock price has been trading up since the beginning of the year.
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