CenturyLink Sells Its Data Centers

November 4th, 2016 by · 6 Comments

And the week in M&A is still going on.  CenturyLink this morning followed up its announcement to buy Level 3 Communications with another one selling its data centers and colo business to private equity.

CenturyLink has entered into an agreement to sell the division to a consortium of funds advised by BC Parnters and led by Medina Capital Advisors and Longview Asset Management.  They’ll get $2.15B in cash and keep a minority stake worth $150M in the new company.  They’ll use those funds to help fund the cash portion of the Level 3 deal.

A big piece of of CenturyLink’s colo business came from the Savvis acquisition back in the spring of 2011, and contains a portfolio of 57 data centers stretching across 2.6 million square feet of space fed by some 195MW.  As for the hosting and cloud business that runs within those data centers?  CenturyLink is going to be keeping those to continue to serve the enterprise and business markets.

Just what the private equity guys have in mind is another matter.  They are also buying a suite of security companies to go with it:  Cryptzone, Catbird, Easy Solutions, and Brainspace.  This should be an interesting story going forward.



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Categories: Datacenter · ILECs, PTTs · Mergers and Acquisitions · Security

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6 Comments So Far

  • Anonymous says:

    Isn’t that less than what they paid for these DC assets?

    • Grant Lewis says:

      CTNLK purchased Savvis for $2.5B in cash and stock. They are eliminating the costly maintenance and expense of the DC footprint which positions them nicely for Level 3. It will be interesting to see how long they stay in the cloud services space.

      • Anonymous says:

        Agree, I smell a total dump of the cloud services coming. It was not in L3’s DNA, and its even less in CL’s. They made a mockery of Tier 3, which was a great cloud service contender back in the day. And obviously they did nothing useful with their DC’s, which seem to be going gangbusters for the ones who do it as a core business. L3 has a nothingburger for a DC footprint as well.

        Commoditized bandwidth, that’s all either of them is good at. Wrap it up in a package and call it MPLS, SDWAN, or cloud connect. It is what it is.

  • schmuckinsurance says:

    Saavis was 75% cash, 25% stock or $625mn of that purchase price. Keep in mind thought CTL’s stock is down from $40->$23 since that time so in fact that overvalued currency helps with this analysis especially if the son of terremark can be use these assets($150mn stake) better than CTL could which I have little doubt.

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