By Neha Dimri
Jan 18 Shares of CyrusOne Inc rose as
much as 15 percent on their market debut after the data center
operator priced its offering at the high end of its expected
CyrusOne shares closed up nearly 12 percent at $21.20 on the
Nasdaq on Friday while majority owner Cincinnati Bell's
stock closed down 6 percent at $5.00 on the New York Stock
"What happened with CyrusOne is that people looked at the
parent and found that the parent was very weak. They've
basically spun off a division that's worth more than the
parent," said Francis Gaskins, a partner at IPODesktop.com.
Texas-based CyrusOne priced its offering of 16.5 million
shares at $19 each, raising $313.5 million. At the offer price,
CyrusOne has a market value of about $1.18 billion.
Cincinnati Bell, valued at about $1 billion, will own about
71.6 percent of CyrusOne, which rents equipment, space and
bandwidth to store and transfer data.
CyrusOne had 24 data centers in Austin, Chicago, Cincinnati,
Dallas, Houston, London, South Bend and Singapore as of March
2012, according to its website.
CyrusOne has structured itself as a REIT, joining a string
of technology companies looking to save on tax through the
Companies with large real estate assets eye a REIT structure
as it helps reduce the tax burden on their rental income.
Shareholders also stand to gain as REITs are required to
distribute at least 90 percent of their profits as dividends.
Shares of another REIT and data center company, Digital
Realty Trust Inc, have risen about 8 percent in the last
month, while those of data center operator Equinix Inc,
which is planning a REIT conversion, have risen about 9 percent.
Industry research firm Gartner estimates that the global
market for data center services was about $150 billion in 2011
and will rise to about $200 billion in 2012, the company said in
a regulatory filing.
Morgan Stanley and BofA Merrill Lynch were joint-bookrunners
to the offering.
SUNCOKE ENERGY DEBUT
Shares of Illinois-based SunCoke Energy Partners LP
opened flat on debut after the metallurgical coal producer
priced its offering at the low end of its expected price range.
The company priced its offering of 13.5 million shares at
$19 each, raising $256.5 million.
The downstream energy limited partnership listed Credit
Suisse and Citigroup as lead underwriters to the offering.
SunCoke Energy Partners' share closed down 4 percent at
$18.25 on the New York Stock Exchange.