Growth Profile
Digital Realty expects the acquisition to be approximately 2 percent accretive to its 2018 Core FFO/share and around 4 percent accretive to its 2018 AFFO/share. However, this forecast may prove to be conservative as the deal could prove to be 4 percent accretive to 2018 Core FFO/share and 7 percent accretive to 2018 AFFO/share, the analyst noted.
In addition, Digital Realty's five-year revenue compounded annual growth will increase 110 basis points to 7.8 percent, which generates even higher accretion in outer-years.
Strategic Value
Digital Realty hasn't played a major role in the super wholesale/hyper-scale segment of the data center industry over the past 18 months, Synesael argued. But this is poised to change as the acquisition of DuPont Fabros gives the company a holistic solution set that includes interconnect/colocation, wholesale/scale and super-wholesale/hyper-scale.
Digital Realty will now be of "increasing strategic value" to hyper-scale providers in the same way that providers that offer macro towers and small cells will be of value to the wireless telecom industry, the analyst added.
Related Links: Benzinga's Top Upgrades, Downgrades For June 12, 2017 The Market In 5 Minutes© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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