QTS Realty Trust, Inc. Announces Pricing of Public Offering of Common Stock

OVERLAND PARK, Kan., Feb. 26, 2019 /PRNewswire/ -- QTS Realty Trust, Inc. (the "Company") (NYSE: QTS) today announced the pricing of an underwritten public offering of 6,750,000 shares of its Class A common stock ("common stock"), of which 4,000,000 shares were offered directly by the Company, and 2,750,000 shares were offered, at the request of the Company, by the forward purchaser (as defined below) or its affiliate in connection with the forward sale agreement described below, at a public offering price of $41.50 per share (before deducting the underwriting discounts and commissions). The forward purchaser or its affiliate has also granted the underwriters a 30-day option to purchase an aggregate of up to an additional 1,012,500 shares of common stock.

In connection with the offering of the Company's common stock, the Company entered into a forward sale agreement with Jefferies LLC (who is referred to in such capacity as the "forward purchaser"), with respect to 2,750,000 shares of the Company's common stock covered by the offering. The forward purchaser or its affiliate is expected to borrow from third parties and sell to the underwriters 2,750,000 shares of the Company's common stock in connection with the forward sale agreement (or an aggregate of 3,762,500 shares if the underwriters exercise their option to purchase additional shares in full).

Pursuant to the terms of the forward sale agreement, and subject to the Company's right to elect cash or net share settlement under the forward sale agreement, the Company intends to issue and sell, upon physical settlement of such forward sale agreement, 2,750,000 shares of its common stock to the forward purchaser (or an aggregate of 3,762,500 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 agreement. The Company expects to physically settle the forward sale agreement in full and receive proceeds by March 1, 2020.

The Company will receive proceeds from the sale of shares of its common stock offered by it in the offering, but will not initially receive any proceeds from the sale of shares of its common stock offered by the forward purchaser or its affiliate 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 $268.5 million, assuming full physical settlement of the forward sale agreement and excluding the option to purchase additional shares.

The Company intends to use the net proceeds of the offering to repay a portion of the amounts outstanding under its unsecured revolving credit facility, for capital expenditures, including the development of properties in its 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 March 28, 2016. A prospectus supplement relating to the offering will be filed with the Securities and Exchange Commission.

Jefferies, KeyBanc Capital Markets, SunTrust Robinson Humphrey, BofA Merrill Lynch, Deutsche Bank Securities, Goldman Sachs & Co. LLC, J.P. Morgan, Mizuho Securities, Morgan Stanley and Stifel 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: Jefferies LLC, 520 Madison Avenue, 2nd Floor, New York, NY 10022, Attention: Equity Syndicate Prospectus Department, Telephone: 1-877-821-7388, E-mail: [email protected], KeyBanc Capital Markets Inc., 127 Public Square, 4th Floor Cleveland, Ohio 44114, Attention: Equity Syndicate, Telephone: (800) 859-1783 or SunTrust Robinson Humphrey, Inc., 3333 Peachtree Road NE, 9th Floor Atlanta, GA 30326, Attention: Prospectus Department, Telephone: (404) 926-5744, Fax: (404) 926-5464, E-mail: [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.

About QTS
QTS Realty Trust, Inc. (NYSE: QTS) is a leading provider of data center solutions across a diverse footprint spanning more than 6 million square feet of owned mega scale data center space throughout North America. 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 Company's 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 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; 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, 2018.

QTS Investor Relations Contact:
Stephen Douglas
VP Investor Relations and Strategic Planning
[email protected]

Media Contact:         
Carter B. Cromley
(703) 861-8245 
[email protected]

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SOURCE QTS Realty Trust, Inc.