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Blackstone Bet on E-Commerce. Its New QTS Deal Is a Data Play.Blackstone Bet on E-Commerce. Its New QTS Deal Is a Data Play.English, Carleton.Barron's (Online); New York Blackstone Group just notched another deal that shows the firm's commitment to high-growth areas. On Monday, the private-equity company (ticker: BX) announced plans to acquire QTS Realty Trust (QTS) in a deal that values the Overland Park, Kansas-based data-center operator at $10 billion, including debt. With more than 7 million square feet of space in North America and Europe, QTS serves a variety of companies that need to store and process data. Over the past few years, Blackstone has acquired warehouse space totaling 880 million square feet as a play on the growth of e-commerce. Blackstone is now the largest owner of e-commerce warehouse space, The Wall Street Journal noted when first reporting news of the Blackstone-QTS deal. With data centers, Blackstone is positioning itself to ride another burgeoning trend . "We are focused on investing in assets that are benefiting from strong, secular tailwinds, such as the rapid digitalization of data," Tyler Henritze, head of acquisitions for the Americas at Blackstone Real Estate, said in a statement. "QTS is a leading provider of data center solutions with a portfolio of high-quality assets in desirable markets, positioning it well to capitalize on these powerful trends in the data center space ," With its focus on data, QTS was one of the better-performing real estate investment trusts early in the pandemic, given that many peers were under pressure as people no longer went to the office or retail centers. But so far this year, QTS has lagged behind as investors have become more confident about real estate. QTS shares are up 26% this year, including a 20% pop from the Blackstone deal, while the SPDR Dow Jones REIT ETF (RWR) has gained 24%. Under terms of the agreement, QTS is allowed to solicit other acquisition proposals during a 40-day "go-shop" period that expires on July 17. Assuming no competing bids emerge, the deal is expected to close in the second half of the year, subject to shareholder approval and other conditions. Blackstone (BX) is completing the deal alongside Blackstone Infrastructure Partners, Blackstone Real Estate Income Trust, and its so-called perpetual capital vehicles. Those are entities that allow Blackstone to hold investors' cash for the long term, rather than having to return it after a fixed period, as is typical in the world of private equity. Investors sell their holdings of the units to cash out. |
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