CyrusOne (NASDAQ:CONE) announced on November 15, 2021 that it is being bought by KKR & Co and Global Infrastructure Partners LLC for $15 billion and shareholders will receive $90.50 in cash per share. The deal is expected to close sometime in the second quarter of 2022. This price is a 25% increase from the closing price on September 27, 2021, after which there was public speculation about a possible sale.
CyrusOne is a Real Estate Investment Trust (REIT) based in Dallas that designs, constructs, and operates data centers. This is a small position in the portfolio (just under 1%) as it was approved at the end of the Spring 2021 semester when a student analyst was able to convince a majority of her peers with her pitch that we sell 50% of Store Capital Corp (NYSE: STOR), a single tenant net-lease REIT to buy CyrusOne.
The student analyst argued that the portfolio should increase our investments in tech through data center REITs and in particular invest in CONE, which provides mission-critical data center facilities that protect and ensure the continued operation of information technology (“IT”) infrastructure for approximately 1,000 customers. The analyst felt that the company was undervalued and projected large growth (noting that it would grow 20% by 2022 just from the completion of projects).
I will continue to share updates on companies in our portfolios that might be of interest to you.
Rodney E. Lake
Director, GW Investment Institute