AT&T is looking into selling its data centre business and has hired Bank of America to help explore the option, the Wall Street Journal reported, citing sources close to the matter. The sources see EBITDA for the carrier’s data centre operations at about USD 135 million and expect the unit to bring in an Ebitda multiple in the high-single-digit range, an amount that could pass USD 1 billion, based on the quality of the facilities.
The idea behind the sale is to better focus on core wireless and video business operations. Still, the sources said that the process is still ongoing and may not result in a sale. AT&T had previously looked into selling its data centre and managed-hosting businesses with Citigroup, the sources said, but ended up only selling its hosting business to IBM, in 2015.
Many of the large companies in the US have ditched their data centre businesses. Verizon sold 24 data centres to Equinix for USD 3.6 billion in late 2016. CenturyLink sold its data centres and collocation for USD 2.3 billion in November 2016, to a consortium of funds advised by BC Partners. Windstream in October 2015 sold its data centre operation to TierPoint, for USD 575 million.
AT&T could also be looking for a way to raise funds, after making a bid to acquire Time Warner for USD 85 billion in 2016. It is still waiting for all approvals to roll in.
