OVERLAND PARK, Kan., June 1, 2020 /PRNewswire/ -- QTS Realty Trust, Inc. (the "Company") (NYSE: QTS) today announced the upsize and pricing of an underwritten public offering of 4,400,000 shares of its Class A common stock ("common stock"), all of which were offered, at the request of the Company, by the forward purchasers (as defined below) or their affiliates in connection with the forward sale agreements described below, at a public offering price of $64.90 per share (before deducting the underwriting discounts and commissions). The offering was upsized from the previously announced offering size of 4,000,000 shares of common stock. The forward purchasers or their affiliates have also granted the underwriters a 30-day option to purchase an aggregate of up to an additional 660,000 shares of common stock.
In connection with the offering of the Company's common stock, the Company entered into separate forward sale agreements with each of BofA Securities and Morgan Stanley & Co. LLC or their affiliates (who are each referred to in such capacities as the "forward purchasers"), with respect to 4,400,000 shares of the Company's common stock covered by the offering. The forward purchasers or their affiliates are expected to borrow from third parties and sell 4,400,000 shares of the Company's common stock to the underwriters in connection with the forward sale agreements (or an aggregate of 5,060,000 shares if the underwriters exercise their option to purchase additional shares in full).
Pursuant to the terms of the forward sale agreements, and subject to the Company's right to elect cash or net share settlement under the forward sale agreements, the Company intends to issue and sell, upon physical settlement of such forward sale agreements, 4,400,000 shares of its common stock to the forward purchasers (or an aggregate of 5,060,000 shares if the underwriters exercise their option to purchase additional shares in full) in exchange for cash proceeds per share equal to the applicable forward sale price per share, which will initially be the public offering price per share in the offering, less underwriting discounts and commissions, and will be subject to certain adjustments as provided in the forward sale agreements. The Company expects to physically settle the forward sale agreements in full and receive proceeds by June 30, 2021.
The Company will not initially receive any proceeds from the sale of shares of its common stock offered by the forward purchasers or their affiliates to the underwriters, except in certain circumstances described in the prospectus supplement relating to the offering. The Company estimates that net proceeds to it, after deducting the underwriting discounts and commissions and other estimated offering expenses, will be approximately $273.6 million, assuming full physical settlement of the forward sale agreements, and excluding the option to purchase additional shares.
When drawn, the Company intends to use the net proceeds of the offering to repay a portion of the amounts outstanding under the Company's unsecured revolving credit facility, for capital expenditures, including the development of properties in the Company's portfolio, and for other general corporate purposes.
The offering is being made pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission on April 17, 2019. A prospectus supplement relating to the offering will be filed with the Securities and Exchange Commission.
BofA Securities, Morgan Stanley, Goldman Sachs & Co. LLC, Jefferies and J.P. Morgan are joint book-running managers for the offering. A copy of the preliminary prospectus supplement, final prospectus supplement (when available) and the accompanying prospectus may be obtained from: BofA Securities, NC1-004-03-43, 200 North College Street, 3rd Floor, Charlotte, NC 28255-0001, Attention: Prospectus Department or by email at [email protected], Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014, Attention: Prospectus Department, Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, or by telephone at (866) 471-2526, or by facsimile at (212) 902-9316, or by email at [email protected], Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, 2nd Floor, New York, NY 10022, by telephone at 1-877-821-7388 or by email at [email protected] or J.P. Morgan, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by telephone at +1 866 803 9204 or by email at [email protected].
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
QTS Realty Trust, Inc. (NYSE: QTS) is a leading provider of data center solutions across a diverse footprint spanning more than 7 million square feet of owned mega scale data center space throughout North America and Europe. Through its software-defined data center platform, QTS is able to deliver secure, compliant infrastructure solutions, robust connectivity and premium customer service to leading hyperscale technology companies, enterprises, and government entities.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In particular, statements pertaining to the coronavirus pandemic, its impact on the Company and the Company's response thereto and the Company's strategy, plans, intentions capital resources, portfolio performance, results of operations, anticipated growth in the Company's funds from operations and anticipated market conditions contain forward-looking statements. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You also can identify forward-looking statements by discussions of strategy, plans or intentions.
The forward-looking statements contained in this press release reflect the Company's current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ significantly from those expressed in any forward-looking statement. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in the Company's markets or the technology industry; obsolescence or reduction in marketability of the Company's infrastructure due to changing industry demands; global, national and local economic conditions; risks related to the COVID-19 pandemic, including, but not limited to, the risk of business and/or operational disruptions, disruption of the Company's customers' businesses that could affect their ability to make rental payments to the Company, supply chain disruptions and delays in the construction or development of the Company's data centers; risks related to the Company's international operations; difficulties in identifying properties to acquire and completing acquisitions; the Company's failure to successfully develop, redevelop and operate acquired properties or lines of business; significant increases in construction and development costs; the increasingly competitive environment in which the Company operates; defaults on, or termination or non-renewal of, leases by customers; decreased rental rates or increased vacancy rates; increased interest rates and operating costs, including increased energy costs; financing risks, including the Company's failure to obtain necessary outside financing; dependence on third parties to provide Internet, telecommunications and network connectivity to the Company's data centers; the Company's failure to qualify and maintain its qualification as a real estate investment trust, or REIT; environmental uncertainties and risks related to natural disasters; financial market fluctuations; changes in real estate and zoning laws, revaluations for tax purposes and increases in real property tax rates; risks related to the forward sale agreements; and limitations inherent in the Company's current and any future joint venture investments, such as lack of sole decision-making authority and reliance on the Company's partners' financial condition.
While forward-looking statements reflect the Company's good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as well as other periodic reports that the Company files with the Securities and Exchange Commission, many of which should be interpreted as being heightened as a result of the ongoing COVID-19 pandemic and the actions taken to contain the pandemic or mitigate its impact.
QTS Investor Relations Contact:
Carter B. Cromley
SOURCE QTS Realty Trust, Inc.