Dupont Fabros's Stock Soars Toward Record After Digital Realty Buyout Deal

Shares of Dupont Fabros Technology Inc. soared 13% in premarket trade Friday toward a record high, after the developer and operator of multi-tenant data centers announced an agreement to be acquired by Digital Realty Trust Inc. in an all-stock deal that values Dupont Fabros at $4.95 billion. Under terms of the deal, Digital Realty will exchange 0.545 of its shares for each Dupont Fabros share outstanding. Based on Thursday's closing prices, that values Dupont Fabros shares at $63.63 each, or 14.9% above the previous session's close of $55.36, and 13.3% above the June 2 record close of $56.16. The deal is expected to close in the second half of 2017, and to immediately add to financial metrics and to strengthen the balance sheet. The merger is expected to realize synergies of $18 million a year. "This strategic and complementary transaction significantly enhances Digital Realty's ability to support the growth of hyper-scale users in the top U.S. data center metro areas, while providing meaningful customer and geographic diversification for DuPont Fabros," said Digital Realty Chief Executive William Stein. Dupont Fabros's stock has rallied 26% year to date through Thursday, while Digital Realty shares have climbed 19% and the S&P 500 has gained 8.7%.