Data center developer DuPont Fabros Technology (DFT) will price shares for its initial public offering at $19 to $21 per share, the company said in an SEC filing on Oct. 5. DuPont Fabros plans to sell 30.575 million shares in the IPO, with underwriters Lehman Brother and UBS having an option to buy another 4.5 million shares. If the company sells all 35.075 million shares at $21, it would raise $736 million. The IPO is scheduled sometime during the week of Oct. 15.
DuPont Fabros announced in August that it filed for an IPO as a real estate investment trust. The Washington-based company is an experienced player in the data center space, with five fully-occupied data centers in northern Virginia leased to tenants including Microsoft (MSFT), Yahoo (YHOO) and Google (GOOG). It also owns 13 properties for future development as data centers.
The DuPont Fabros offering is shaping up as a significant indicator of investor interest in the data center sector, as it represents the first IPO by a "pure-play" data center builder since the resurgence began in the data center market. The company plans to trade on the New York Stock Exchange under the symbol DFT.
In addition to its current holdings, DuPont Fabros has developed and then sold properties to Equinix (EQIX) and Digital Realty Trust (DLR). The company expects to invest between $880 million and $1.1 billion to complete the four data centers on its construction schedule for 2008 and 2009, which are located in Chicago, Ashburn, Santa Clara, Calif. and Piscataway, N.J. The four projects will bring an additional 735,000 square feet of premium data center space onto the market. The nine remaining development properties in DuPont Fabros' portfolio total about 1.1 million square feet of space.
In the three months ended March 31, DuPont Fabros had revenue of $21.6 million, net operating income of $1.15 million, and funds from operations (FFO, a key metric for REITs) of $8.14 million, the company says in its S1 filing with the SEC. DuPont Fabros' five completed buildings generate annual rent of nearly $77 million, with Microsoft and Yahoo accounting for 86 percent of that total.