CenturyLink retains hosting and cloud assets, plus minority stake in consortium's newly formed global secure infrastructure company
MONROE, La., May 2, 2017 /PRNewswire/ -- CenturyLink, Inc. (NYSE:CTL, news, filings) today announced it completed the previously announced sale of its data centers and colocation business on May 1 to funds advised by BC Partners, in a consortium including Medina Capital Advisors and Longview Asset Management.
CenturyLink has received (i) approximately $1.86 billion of pre-tax net cash proceeds, subject to certain post-closing adjustments, and (ii) an approximately 10% equity stake in the consortium's newly formed global secure infrastructure company, Cyxtera Technologies. CenturyLink plans to use the net after-tax proceeds from this sale to partly fund its acquisition of Level 3 Communications announced on Oct. 31, 2016.
"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 Glen F. Post III, chief executive officer and president of CenturyLink. "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. Additionally, our hosting and cloud services, combined with our robust IT services and solutions, offer customers an impressive suite of complementary services."
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's minority stake in Cyxtera signals CenturyLink's ongoing commitment to colocation. CenturyLink intends to continue to offer colocation services as part of its hybrid IT offerings through its commercial relationships with Cyxtera.
CenturyLink (NYSE: CTL) is a global communications and IT services company focused on connecting its customers to the power of the digital world. CenturyLink offers network and data systems management, big data analytics, managed security services, hosting, cloud, and IT consulting services. The company provides broadband, voice, video, advanced data and managed network services over a robust 265,000-route-mile U.S. fiber network and a 360,000-route-mile international transport network. Visit CenturyLink for more information.
Forward Looking Statements
Except for the historical and factual information contained herein, the matters set forth in this release, including statements regarding the expected timing and benefits of the proposed transaction, and other statements identified by words such as "estimates," "expects," "projects," "plans," and similar expressions, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to: the possibility that the anticipated pre-tax or after-tax benefits from the transaction cannot be fully realized in the manner contemplated; changes in CenturyLink's cash requirements or financial condition; the possibility that it may be more difficult than anticipated to segregate CenturyLink's colocation business from its other businesses in connection with the sale; the possibility that CenturyLink might be required to make unanticipated payments under the transaction agreements or otherwise receive less cash proceeds than anticipated; the effects of competition from a wide variety of competitive providers; the purchaser's ability to effectively adjust to changes in the communications industry; possible changes in the demand for, or pricing of, the purchaser's products and services; the purchaser's ability to successfully maintain the quality and profitability of its product and service offerings and to introduce new offerings on a timely and cost-effective basis; the adverse impact on the purchaser's business from possible equipment failures, service outages, security breaches or similar events; adverse changes in the purchaser's access to credit markets on favorable terms; the purchaser's ability to maintain favorable relations with key business partners, suppliers, vendors, landlords and financial institutions; and other risk factors and cautionary statements as detailed from time to time in CenturyLink's reports filed with the U.S. Securities and Exchange Commission. You should be aware that new factors may emerge from time to time and it is not possible for us to identify all such factors nor can we predict the impact of each such factor on the transaction. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, CenturyLink undertakes no obligation and expressly disclaims any such obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE CenturyLink, Inc.