8-K/AMaterial AgreementsSecurities & ListingShareholder Matters+3

DIGITAL REALTY TRUST, INC. 8-K/A Report, Material Agreement (Oct 19, 2015)

Filed October 19, 2015For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) filed an 8-K/A amendment on October 19, 2015, to provide further details on its previously announced acquisition of Telx Holdings, Inc. (Telx), which closed on October 9, 2015. The amendment clarifies the issuance of partnership units and the associated changes to the Partnership Agreement. It also includes unaudited pro forma condensed combined financial information to reflect the impact of the Telx acquisition and other related financing transactions. Key information for investors pertains to the structure of the Telx acquisition, including partial payment with Digital Realty Trust, L.P.'s Series I preferred units and common units. The pro forma financials offer a glimpse into the combined entity's financial position and performance, adjusted for the acquisition and various debt and equity offerings, providing a basis for understanding the potential financial scale of the combined business post-acquisition.

Key Highlights

  • 1Digital Realty Trust, Inc. completed the acquisition of Telx Holdings, Inc. on October 9, 2015.
  • 2The company amended its filings to include additional financial information related to the Telx acquisition and updated its Limited Partnership Agreement.
  • 3Digital Realty Trust, L.P. issued 10,000,000 Series I cumulative redeemable preferred units and 10,500,000 common units to Digital Realty Trust, Inc. as partial consideration for the acquisition.
  • 4The acquisition of Telx was financed through a combination of preferred stock offering, private placement of notes (Delta Notes), and a forward equity sale.
  • 5The filing includes unaudited pro forma condensed combined financial statements as of June 30, 2015, and for the six months ended June 30, 2015, and the year ended December 31, 2014, reflecting the impact of the Telx acquisition and other transactions.
  • 6Preliminary purchase price allocation for the Telx acquisition indicates significant amounts allocated to goodwill and intangible assets like customer relationships.

Frequently Asked Questions

This filing serves as an amendment to a previous 8-K report. Its main purposes are to provide additional financial information related to the recently completed acquisition of Telx Holdings, Inc. and to disclose changes to the Fourteenth Amended and Restated Agreement of Limited Partnership of Digital Realty Trust, L.P.

The Telx acquisition was financed through a multi-pronged approach. This included net proceeds from the issuance of Digital Realty Trust, Inc.'s 6.350% series I cumulative redeemable preferred stock, a private placement of notes by Digital Delta Holdings, LLC (the 'Delta Notes Offerings'), and the net proceeds from the sale of Digital Realty Trust, Inc. common stock under forward sale agreements.

Digital Realty Trust, L.P. issued 10,000,000 Series I cumulative redeemable preferred units to its general partner, Digital Realty Trust, Inc., as partial consideration for the Telx acquisition. These units have terms substantially similar to the Series I cumulative redeemable preferred stock previously issued by Digital Realty Trust, Inc.

The pro forma financial information indicates that the acquisition significantly increases Digital Realty's asset base. It also shows adjustments to revenues and expenses, notably an increase in depreciation and amortization due to the fair value accounting of acquired assets and intangible assets, as well as changes in interest expense due to the financing structure of the acquisition.