Digital Realty said it will acquire a majority ownership position in three fully leased data center facilities located in Northern Virginia, in a transaction that values the assets at $7.8 billion. The properties are being purchased from Blackstone-managed funds, and the transaction is intended to bolster Digital Realty's presence in Northern Virginia, described as the world's largest data center market.
Under the terms announced, Digital Realty will pay Blackstone-affiliated funds a total of $3.5 billion for their combined 64% equity stake in the three data centers. That total consideration is structured as $1.2 billion in cash plus $2.3 billion in Digital Realty shares. The share component is calculated using Digital Realty's last reported share price as of June 29.
The companies say the deal is expected to close on June 30. Digital Realty framed the acquisition as reinforcing its position in Northern Virginia, where the company notes demand for additional capacity has surged as cloud computing and artificial intelligence increase infrastructure requirements.
Transaction details
- Assets valued: $7.8 billion for three fully leased Northern Virginia data centers.
- Purchase price to Blackstone-affiliated funds: $3.5 billion for a blended 64% equity interest.
- Consideration mix: $1.2 billion cash; $2.3 billion in Digital Realty shares, based on the company's last reported price on June 29.
- Anticipated close date: June 30.
Market context
The deal is positioned as a strategic consolidation of Digital Realty's footprint in Northern Virginia, a region identified in the announcement as the world's largest data center market. The stated rationale points to a surge in demand for capacity driven by cloud computing and artificial intelligence, which the companies say is raising infrastructure needs.
What this means for stakeholders
For Digital Realty, the acquisition represents a material expansion of owned capacity in a prime data center market through a combination of cash and equity consideration. For Blackstone-affiliated funds, the transaction converts their blended 64% equity interest in the three facilities into $3.5 billion of cash and stock proceeds.
Note: The above reflects the terms and statements disclosed around the transaction, including the valuation, consideration mix and the expected closing date. The share component was computed using Digital Realty's last reported share price on June 29.