QTS Realty Goes Public Today

Data center developer QTS Realty Trust is going public today, hoping to raise between $365 million and $422 million through an initial public offering on the New York Stock Exchange. The QTS offering will provide an indication of Wall Street’s appetite for data center IPOs, and be of keen interest to other companies in the sector that have filed to go public, including IO and hosting industry consolidator Endurance International.

In a regulatory filing last week, QTS Realty said it expects to sell 12.25 million shares of common stock at a price between $27 and $30 per share. At the midpoint of the proposed range, QTS Realty Trust would have a market value of about $995 million. The company plans to convert to a real estate investment trust (REIT) and list on the NYSE under the symbol QTS.

The QTS offering arrives as Wall Street is receptive to IPOs. There have been 159 IPOs thus far in 2013, and 110 of those companies have seen their share prices move higher after going public, according to IPO Scoop.

The offering by QTS is a key step in the company’s ambitious growth strategy, which has focused on buying massive industrial facilities and adapting them for data center use. The company hopes to expand seven of its data centers across the county, investing up to $277 million to add more than 312,000 square feet of customer space in key markets over the next two years.

QTS operates 10 data centers in seven states offering 714,000 square feet of raised floor data center space and 390 megawatts of available utility power. The company reported revenue of $84.4 million in the first half of 2013, with net income of $7.1 million and funds from operation (FFO, a key benchmark for REITs) of $26.7 million. In 2012, the company had revenues of $157.6 million and FFO of $45.2 million.