CenturyLink received approximately $1.86 billion of pre-tax net cash proceeds, subject to certain post-closing adjustments, and approximately 10 per cent equity stake in the consortium’s newly formed global secure infrastructure company named Cyxtera Technologies.
CenturyLink plans to use the net after-tax proceeds from this sale to partly fund its acquisition of Level 3 Communications announced in October last year.
Reports of a CenturyLink data centre sell off have been around for about three years now. In 2015, the company hired financial advisers to assess the viability of alternatives to running its global network of 59 data centres. At that time, CenturyLink CEO Glen Post said that he expected colocation to continue to be in demand but admitted that CenturyLink did not believe it had to own data centres to provide such a service.
“This sale allows CenturyLink to drive greater focus on our network infrastructure while still having the ability to sell colocation services in these data centers,” said Post in a press statement released yesterday. “CenturyLink provides reliable and secure network solutions that are critical to the success of businesses which increasingly rely on digital connections to help ensure the growth and success of their operations.”
He said CenturyLink’s hosting, cloud services, IT services, and solutions will complement the network-focused strategy.
In taking over CenturyLink’s colocation business, the consortium will also be inheriting CenturyLink’s customers, operations team, product management team, sales, and marketing team, as well as, data centre engineering and innovation teams.
Under terms of the agreement, Cyxtera assumes ownership of CenturyLink’s portfolio of 57 data centers which includes approximately 195 megawatts of power across 2.6 million square feet of raised floor capacity. Approximately 700 CenturyLink employees will transition to Cyxtera.
CenturyLink intends to continue to offer colocation services as part of its hybrid IT offerings through its commercial relationships with Cyxtera.
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