CenturyLink has agreed to sell its data centres and colocation business to a consortium of funds advised by BC Partners for USD 2.15 billion in cash, plus a minority stake valued at USD 150 million in the consortium’s newly-formed global secure infrastructure company. CenturyLink will keep hosting and cloud assets supporting its network-first and hybrid-IT strategy and will focus on IT services and systems, including network, managed hosting and cloud. Though it will no longer own the data centres, the company will continue to provide colocation services through a contract it plans to ink with the consortium. The consortium includes Medina Capital Advisors and Longview Asset Management.
CenturyLink said it plans to use proceeds from the sale to partly fund its acquisition of Level 3 Communications. The sold data centres will become part of a new, global secure infrastructure platform headed by Manny Medina and his management team at Medina Capital. Under terms of the agreement, the BC Partners/Medina-led consortium will assume ownership of CenturyLink's portfolio of 57 data centres at closing.
The portfolio includes about 195 megawatts of power across 2.6 million square feet of raised floor capacity. The cash portion will be subject to offsets for capital lease obligations and different working capital and other adjustments. In total, the acquisition represents a multiple of 12 times estimated 2016 adjusted operating cash flow.
The purchase agreement contains various customary agreements and is expected to close in the first quarter of next year.
