News Column

QTS Buys New Jersey Data Center from McGraw Hill Financial; Partners with Atos

July 8, 2014

QTS Realty Trust has completed the acquisition of a data center facility in East Windsor, New Jersey, from McGraw Hill Financial, for approximately $75 million, and has formed a new strategic partnership with Atos.

According to a release from the Company, the acquisition highlights one of QTS' growth strategies of acquiring enterprise- owned data centers that are underutilized by their current owners. This further supports QTS' strategy, which focuses on infrastructure rich, large-scale data center facilities at a low cost in strategic markets.

QTS believes that there are a large number of enterprise customers similar to McGraw Hill Financial who are looking for outsourcing solutions for their internal data center needs, but require a data center provider with a fully integrated technology services platform to enable the IT transformation. QTS leverages its integrated 3C product mix to offer the combination of real estate ownership and technology services that supports a true enterprise partnership which can unlock these enterprise outsourcing opportunities.

In connection with the purchase of the McGraw Hill Financial data center, QTS has also signed a 10-year lease, plus a 15-year extension option, with Atos, an international information technology services company headquartered in Bezos, France. Under this arrangement, QTS will provide Atos with its custom data center (C1) offering as well as its new QTS Critical Facilities Management service (CFM), which leverages QTS' expertise in data center management and services to run data center facilities for enterprise customers. Atos will package QTS' C1 and CFM services with their own IT outsourcing service offering for McGraw Hill Financial, who will continue to locate their data center needs in the New Jersey facility.

This Atos arrangement represents the launching of a new strategic relationship, in which Atos has chosen QTS to act as their North American data center partner. Under this relationship, QTS will provide enterprise data center ownership and outsourcing opportunities, along with critical facilities management capabilities to Atos. Atos will package these capabilities with their technology services solutions, to meet the full IT needs of blue chip enterprise customers.

"Atos' North American business model is strengthened by our strategic partnership with QTS," said John Evers, Chief Executive Officer - Atos North America. "We selected QTS based on their integrated technology service capabilities combined with their CFM offering. In addition, their strength in security and compliance, as well as their scale and national footprint, make them a unique partner for Atos. "

The acquisition totals more than 194 acres, with a facility consisting of 560,000 gross square feet, 58,000 square feet of raised floor and 12 megawatts of gross power. The facility also has the ability to more than double with additional expansion capacity to add approximately 100,000 square feet of raised floor and up to 20 megawatts of gross power.

In addition, the facility comes with a 50-acre, 14.1 megawatt solar field. It is one of the largest privately-owned, net metered solar projects in the western hemisphere and has an estimated annual carbon reduction of nearly 14,000 tons.

QTS has initially financed this transaction through its revolving credit facility and is exploring certain long-term funding options. The triple net lease with Atos should generate an initial return of 10 percent+. QTS expects that the additional facility capacity will enhance future returns. QTS plans to provide more details regarding the acquisition and the possible long-term funding on the second quarter conference call, scheduled for Wednesday, July 30.

QTS Realty Trust is a national provider of data center solutions and fully managed services.

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Source: Professional Services Close - Up

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