Lumen Technologies Officially Sells EMEA Business For $1.8B
On the heels of job cuts and debt restructuring news, the telecom giant announces that it has closed on its deal to sell its EMEA business to London-based Colt Technology Services that it announced last year.
Lumen Technologies, formerly CenturyLink, has closed on the sale of its European, Middle Eastern, and African (EMEA) business to Colt Technology Services in a deal that will give the telecom giant $1.8 billion.
Lumen, which has struggled financially in recent years, said it plans to use the proceeds on debt reduction, which will free the company up to fund its plans for future growth, which include a focus on Network as a Service (NaaS) -- specifically, the Lumen Internet on Demand offering, fiber, and Secure Access Service Edge (SASE).
Growth by divestiture has been a big part of the company’s strategy over the last year. Lumen in November 2022 announced the exclusive arrangement for the proposed sale of its EMEA business to Colt Technology Services. The company in 2022 also finalized the $7.5 billion sale of its incumbent local exchange carrier (ILEC) business, which included its consumer, small business, wholesale and mostly copper-served enterprise customers and assets in 20 states to Brightspeed, a brand new company that launched its operations last fall. Two months earlier, Lumen closed the sale of its Latin American Business to investment firm Stonepeak for $2.7 billion.
“We’re excited about what this transaction does for our customers and for Lumen,” said Lumen President and CEO Kate Johnson in a statement on the closed Colt deal. “Our focus on building deep relationships with strategic partners allows us to simplify our business while delivering a seamless networking experience for our multinational customers. Through our strong relationship with Colt, both companies are well positioned for future growth.”
The company on Tuesday during its Q3 2023 earnings call also revealed plans to free up more funds by cutting 4 percent of its workforce and restructuring $7 billion of existing debt. Via the terms of the transaction, the company’s creditor group will provide $1.2 billion of new financing to Lumen.
Via the terms of the deal struck with Colt Technology Services, Lumen will stay on as a strategic partner for London-based Colt’s customers in North America. The company said that a small team of Lumen employees will continue to support operations in EMEA.
In Lumen’s most recent financial quarter that ended September 30, the company reported total revenue of $3.64 billion, representing a decline of 17.1 percent compared to $4.39 billion in the year-ago period. The company attributed about 73 percent of its revenue declines to post-closing commercial agreements and lingering results of its divestitures.