CenturyLink To Sell Off Its Data Centers, Co-Location Business For $2.15B


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CenturyLink is the latest carrier to exit the data center business, saying Friday it plans to sell off its data centers and co-location business for $2.15 billion to a group of funds advised by investment firm BC Partners.

BC Partners will work in a consortium that also includes Medina Capital Advisors and Longview Asset Management. The deal will roll CenturyLink's 57 data centers and co-location business into the consortium's newly formed global secure infrastructure company, according to CenturyLink in a statement.

Via the terms of the transaction, CenturyLink will receive $2.15 billion in cash and a minority stake valued at $150 million in the new infrastructure company.

[Related: CenturyLink Merger With Level 3 Gives Partners More To Sell In The Enterprise]

Monroe, La.- based CenturyLink in October revealed its plan to buy Level 3 Communications in a deal valued at about $34 billion. CenturyLink said it would use the net proceeds from the sale of its data center assets to partly fund the Level 3 acquisition.

The company said that it will hold on to its hosting and cloud assets and will continue to offer a range of networking services and solutions. Despite no longer owning the physical facilities, CenturyLink said it will continue to offer co-location services through the commercial relationship it will enter into with the consortium when the deal closes.

"We believe this transaction will benefit customers, employees and investors," said CenturyLink President and CEO Glen Post in a statement. "Both CenturyLink and BC Partners have a strong customer focus and are committed to ensuring a seamless transition of the customers and their co-location environments."

During CenturyLink's conference call revealing its Level 3 acquisition plans as well as reporting its third-quarter 2016 earnings, Post answered questions around its data center strategy. CenturyLink has told investors during its past several earnings calls that it was evaluating "strategic options" for its data center assets, including a sale of some or all of its facilities. At the time of the third-quarter 2016 earnings call, Post said that the company expected to "successfully complete" the evaluation process during the fourth quarter.

CenturyLink did not comment on its plans for Level 3's data center assets.

The BC Partners-led consortium acquired four security and analytics companies Friday for its new global infrastructure company. These companies include Cryptzone, Easy Solutions, Brainspace and Catbird. The newly created infrastructure and co-location company will have more than 3,500 customers and 2.6 million square feet of raised floor capacity, according to the consortium.

CenturyLink expects the deal with BC Partners to close during the first quarter of 2017.

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