US telecoms giant Centuryink entered a definitive agreement to sell 57 data centres and its colocation business to a consortium including Medina Capital Advisors and Longview Asset Management for just over $2bn in cash and a minority stake in the sold off division.
Centurylink plans to use the net proceeds from this sale to partly fund its acquisition of Level 3 Communications announced on October 31, 2016.
In top line cash terms Centurylink is just about breaking even on a deal it struck in 2011 when it bought a colo firm known as Savvis for $2.5bn.
The telco said it would focus on IT services and solutions, including network, managed hosting and cloud and though it will no longer own the data centers it will continue to offer colocation services as part of its product portfolio through its commercial relationships to be entered into at closing with the BC Partners/Medina-led consortium.
Justin Bateman, a managing partner at BC Partners, said “We are excited to be acquiring CenturyLink’s portfolio of data center assets. CenturyLink has built and maintained an impressive global footprint of colocation data centers that is unparalleled for a portfolio of assets of this size. Led by Manny Medina and his management team at Medina Capital, these data centers will become part of a new, global secure infrastructure platform.”
Centurylink buys Level 3 for $25bn
Under terms of the agreement, the BC Partners/Medina-led consortium will assume ownership of CenturyLink’s portfolio of 57 data centers. The data center portfolio includes approximately 195 megawatts of power across 2.6 million square feet of raised floor capacity.
The parties anticipate closing the transaction in the first quarter of 2017.
Glen F. Post III, chief executive officer and president of CenturyLink. “We believe this transaction will benefit customers, employees and investors. Both Centurylink and BC Partners have a strong customer focus and are committed to ensuring a seamless transition of the customers and their colocation environments.”
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