CyrusOne (CONE) Announces 6.8M Share Common Stock Offering

August 9, 2016 4:13 PM EDT

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CyrusOne Inc. (NASDAQ: CONE) (“CyrusOne”) announced today that it has commenced the public offering of 6,800,000 shares of its common stock, of which 3,400,000 shares will be offered directly by CyrusOne, and 3,400,000 shares will be offered, at the request of CyrusOne, by the Forward Purchaser (as defined below) or its affiliate in connection with the forward sale agreement described below. The underwriters will be granted an option to purchase up to 1,020,000 additional shares of common stock from the Forward Purchaser or its affiliate.

Goldman, Sachs & Co. and Morgan Stanley are acting as joint-bookrunners for the offering.

In connection with the offering of CyrusOne’s common stock, CyrusOne expects to enter into a forward sale agreement with Goldman, Sachs & Co. (who is referred to in such capacity as the “Forward Purchaser”), with respect to 3,400,000 shares of its common stock covered by the offering. The Forward Purchaser or its affiliate is expected to borrow from third parties and sell to the public through the underwriters 3,400,000 shares of CyrusOne’s common stock. In addition, if the underwriters’ option to purchase additional shares is exercised, such additional shares of common stock are expected to be sold by the Forward Purchaser or its affiliate to the underwriters, in which case CyrusOne will enter into one or more additional forward sale agreements with the Forward Purchaser in respect of the number of additional shares of common stock that are subject to the option being exercised.

Pursuant to the terms of the forward sale agreements, and subject to CyrusOne’s right to elect cash or net share settlement under the forward sale agreements, CyrusOne intends to issue and sell, upon physical settlement of such forward sale agreements, 3,400,000 shares of its common stock to the Forward Purchaser (or 4,420,000 shares, if the underwriters’ option to purchase additional shares is exercised in full) in exchange for cash proceeds per share equal to the applicable forward sale price, which will initially be the public offering price, less underwriting discounts and commissions, and will be subject to certain adjustments as provided in the applicable forward sale agreement. CyrusOne expects to physically settle the forward sale agreement (and additional forward sale agreements, if any) in full, which settlement or settlements will occur by August 1, 2017.

CyrusOne will receive proceeds from the sale of 3,400,000 shares of its common stock offered by it in the offering, but will not initially receive any proceeds from the sale of 3,400,000 shares of its common stock (or 4,420,000 shares, if the underwriters’ option to purchase additional shares is exercised in full) offered by the Forward Purchaser or its affiliate to the underwriters, except in certain circumstances described in the prospectus supplement relating to the offering. CyrusOne expects to contribute, directly and indirectly, the net proceeds from the offering to its operating partnership, CyrusOne LP (the “Operating Partnership”), in exchange for an equivalent number of newly issued common units of limited partnership interests in the Operating Partnership. The Operating Partnership is expected to use such proceeds to fund growth capital expenditures related to recently signed leases, to repay borrowings under its senior unsecured revolving credit facility, and for general corporate purposes, which may include funding future acquisitions, investments or capital expenditures.

The shares are being offered pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (“SEC”). The offering will be made only by means of a prospectus supplement and accompanying prospectus. The preliminary prospectus supplement and accompanying prospectus related to the offering has been filed with the SEC and is available on the SEC’s website at http://www.sec.gov. A copy of the preliminary prospectus supplement and final prospectus supplement, when available, along with the accompanying prospectus related to the offering may be obtained by contacting Goldman, Sachs & Co., 200 West Street, New York, New York 10282, Attention: Prospectus Department, by calling (866) 471-2526 or by emailing prospectus-ny@ny.email.gs.com; or Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, New York 10014, Attention: Prospectus Department.



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