Investment firm KKR & Co. Inc. (KKR) via its managed funds and Global Infrastructure Partners (GIP) have completed the acquisition of CyrusOne Inc. for a consideration of $15.1 billion, in an all-cash transaction that also includes the assumption of debt.
Consequently, CyrusOne has also requested a delisting of its common shares from Nasdaq, and trading in its shares has already been suspended.
Management Weighs In
The Co-Founder, President, and CEO of CyrusOne, Dave Ferdman, said, “Closing this transaction begins an exciting new chapter for CyrusOne as we continue our global expansion with the benefit of significant resources and expertise that KKR and GIP are able to provide to the company and its customers.”
Partner at KKR, Waldemar Szlezak, added, “We see significant opportunity ahead for CyrusOne to build on its market-leading position and impressive track record of delivering state of the art data center solutions around the globe, at a time when the world is increasingly dependent on them, at a rapid pace.”
Further, in connection with this transaction, CyrusOne also plans to voluntarily delist its 1.450% senior notes due 2027 and also deregister the notes from registration with the SEC.
Hedge Fund Activity
According to TipRanks data, Wall Street’s top hedge funds have decreased holdings in KKR & Co by 4.8 million shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 18 hedge funds.
Valuation Speaks
Let us consider some of the key metrics for KKR and how it fares against the broader industry.
While KKR’s gross margin of 80% is ahead of the industry median of 63.7%, its net margin of 18.7% is behind the industry median of 30.6%, implying that KKR has significant potential to optimize its operational costs.
Conversely, the company generates $1.44 million in net income per employee, whereas the median industry figure is $104,900, indicating that KKR is superior in utilizing its workforce.
Further, with a return on common equity of 31.9%, KKR has delivered superior returns over its peers where the industry median is 12.8%.
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