CenturyLink completes sale of data centre business to consortium for more than $1.5 billion

Global communications and IT services company CenturyLink has completed the sale of its data centres and colocation business to a consortium led by BC Partners, Medina Capital Advisors and Longview Asset Management.

The deal is worth approximately $1.86 billion in pre-tax net cash proceeds and gives CenturyLink a 10 per cent equity stake in the consortium’s newly formed global secure infrastructure company, Cyxtera Technologies.

Glen F. Post III, chief executive officer and president of CenturyLink, explains in a May 2 press release that this sale “allows CenturyLink to drive greater focus on our network infrastructure while still having the ability to sell colocation services in these data centres.”

The company will retain its cloud and hosting assets, and continue to offer colocation services as part of its hybrid IT offerings through Cyxtera. Cyxtera will take control of CenturyLink’s portfolio of 57 data centres, which involves approximately 195 megawatts of power across 2.6 million square feet of raised floor capacity, as well as 700 CenturyLink employees.

“Retaining our hosting and cloud assets was extremely important to CenturyLink, as we remain committed to delivering a wide range of advanced network services to our customers,” the company tells CDN. “We also believe these assets will be differentiators going forward. CenturyLink is able to deliver world-class hosting and cloud services and our successful recent introduction of our Cloud Application Manager offering, an agnostic, multi-cloud management platform, is proof of this.”

CenturyLink continues to say that in a business climate where companies need to simplify the management of applications across multiple cloud infrastructures without sacrificing control or visibility, “Cloud Application Manager delivers flexibility that enterprises need to quickly provision, deploy and migrate workloads to the environment that best matches business requirements.”

“By continuing to execute on our network-focused strategy, we can continue to serve our customers’ digital needs,” CenturyLink adds.

CenturyLink has been scaling back its data centre business, specifically in Canada, for the past year, and this marks yet another move in its downsizing journey. However, the company assures CDN that the sale is not it walking away from the business.

“We are maintaining an equity stake in this business going forward…and we remain committed to working very closely with partners in several areas of our business. We’ll continue to sell colocation and the data center and colo business is in a safe pair of hands moving forward,” it explains.

CenturyLink moving forward

The company plans to use its net after-tax proceeds from the sale to partially fund its acquisition of Level 3 Communications, which was announced at the end of October 2016. However, while CenturyLink could not provide any further comment as the deal has not been finalized yet, it does hope all approvals will be in by Sept. 30, 2017. Once finalized, the merged company will be the second-largest domestic communications provider serving global enterprise customers.

“Once we combine, we believe CenturyLink’s global network capabilities would be significantly improved, as the transaction would create a company with one of the most robust fiber networks in the world. This expanded network would allow the combined company to bring substantial operational and service benefits to our enterprise customers, as well as further enhancing customer experience,” it concludes.

With notes from Alex Radu.

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Mandy Kovacs
Mandy Kovacshttp://www.itwc.ca
Mandy is a lineup editor at CTV News. A former staffer at IT World Canada, she's now contributing as a part-time podcast host on Hashtag Trending. She is a Carleton University journalism graduate with extensive experience in the B2B market. When not writing about tech, you can find her active on Twitter following political news and sports, and preparing for her future as a cat lady.

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