8-KLeadership ChangesAcquisitions & DispositionsFinancial Events+5

DIGITAL REALTY TRUST, INC. 8-K Report, Acquisition Completed (Sep 14, 2017)

Filed September 14, 2017For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

This 8-K filing announces the successful completion of Digital Realty Trust, Inc.'s (DLR) acquisition of DuPont Fabros Technology, Inc. (DFT) through a merger that closed on September 14, 2017. The merger was structured as a stock-for-stock transaction, where DFT shareholders received 0.545 shares of DLR common stock and a cash payment for fractional shares, while DFT preferred stockholders received DLR preferred stock. This strategic acquisition significantly expands DLR's global data center footprint and capabilities. The filing also details the financial and operational implications of the merger. DLR has entered into new debt arrangements, including a $104 million senior secured term loan for a subsidiary and supplemental indentures for DFT's existing notes, which have had their restrictive covenants amended or eliminated and are being subject to tender offers and redemptions. Additionally, DLR has amended its charter to designate 8,050,000 shares of its common stock as 6.625% Series C Cumulative Redeemable Perpetual Preferred Stock, mirroring the preferred shares issued to former DFT preferred stockholders.

Key Highlights

  • 1Digital Realty Trust, Inc. (DLR) completed the acquisition of DuPont Fabros Technology, Inc. (DFT) on September 14, 2017, via a merger agreement.
  • 2DFT common stockholders received 0.545 shares of DLR common stock and cash for fractional shares per share of DFT common stock.
  • 3DFT preferred stockholders received DLR Series C Cumulative Redeemable Perpetual Preferred Stock with similar rights to their former DFT preferred stock.
  • 4DLR incurred a new $104 million senior secured term loan for a subsidiary as part of the transaction.
  • 5DLR entered into supplemental indentures for DFT's existing 2021 and 2023 notes, including DLR's guarantee and amendments to covenants and redemption terms.
  • 6DLR designated 8,050,000 shares as its 6.625% Series C Cumulative Redeemable Perpetual Preferred Stock, with specific dividend, liquidation, redemption, and change of control provisions.
  • 7Two new directors from DFT, Michael A. Coke and John T. Roberts, Jr., were appointed to DLR's Board of Directors.

Frequently Asked Questions

This 8-K filing announces the material event of the completion of Digital Realty Trust's (DLR) acquisition of DuPont Fabros Technology, Inc. (DFT) on September 14, 2017, through a merger. It details the terms of the acquisition, the consideration paid to DFT shareholders, and the subsequent financial and corporate changes made by DLR as a result of the merger.

DFT common stockholders received 0.545 shares of DLR common stock for each share of DFT common stock they owned, along with a cash payment for any fractional shares. DFT preferred stockholders received shares of DLR's newly designated 6.625% Series C Cumulative Redeemable Perpetual Preferred Stock, which carry substantially similar rights to their original DFT preferred stock.

The merger involved new financing, including a $104 million senior secured term loan for a subsidiary. DLR also assumed or modified DFT's outstanding debt, specifically amending indentures for DFT's 2021 and 2023 notes, with DLR providing guarantees and adjusting covenants and redemption terms. DLR also created and issued 8,050,000 shares of its 6.625% Series C Cumulative Redeemable Perpetual Preferred Stock.

Yes, effective with the merger's completion, two individuals from DuPont Fabros Technology, Inc., Michael A. Coke and John T. Roberts, Jr., were appointed as directors to DLR's Board of Directors, expanding the board.