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Cyxtera confirms $3.4 billion SPAC merger

Written by 3 days ago

Colocation provider confirms merger with Starboard Value Acquisition Corp

Cyxtera Technologies has penned a multi-billion dollar merger with a Special Purpose Acquisition Company, the company confirmed.

In a press release, the retail colocation provider announced a merger with Starboard Value Acquisition Corp (SVAC), valuing it at $3.4 billion.

The announcement follows a report in the Wall Street Journal late Sunday that the companies were close to agreeing a merger.

The combined company will continue to operate Cyxtera’s 61 strong data centre footprint, which spans 29 markets with tenants including Capgemini, Cognizant, Cloudflare, Fujitsu, HPE, Nvidia, and Zenlayer.

Board members on the new company will include directors from BC Partners, Cyxtera’s existing owners, and SVAC Chair Jeff Smith and Industry Advisor Greg Waters. It will continue to operate as Cyxtera following the acquisition with the original owners holding a 58 percent stake.

“By merging with SVAC, we are able to accelerate our plans to drive high-margin growth by increasing utilization of our existing assets, developing innovative product offerings, and expanding our global footprint,” said Nelson Fonseca, CEO of Cyxtera.

Starboard Value Acquisition Corp is a Special Purpose Acquisition Company of the namesake public market investor, Starboard.

SPACs are known as “blank cheque” shell companies that go public on a stock exchange before merging with another company. In other words, Cyxtera stocks will now be tradable on the market without the data centre provider actually having to go through the lengthier process of a traditional IPO.

SVAC went public in September and raised $360 million on the promise of a merger with a large technology, healthcare, consumer, industrial, hospitality, or entertainment company.

“Cyxtera is at an exciting inflection point, poised for significantly improved growth and profitability in an industry with powerful secular tailwinds,” said Jeff Smith, Chair of SVAC and CEO of Starboard.

“Cyxtera’s world-class team, led by Manny and Nelson, has built a high-performance, trusted, and reliable global platform, without losing their customer focus or passion for innovation.”

“Cyxtera is exactly the kind of opportunity we were targeting when we created SVAC. We look forward to partnering with the Cyxtera and BC Partners teams to grow the Company and create value for our shareholders, employees, customers, and partners.”

Former CyrusOne CEO Gary Wojtaszek and CTO Kevin Timmons are rumoured to be launching a SPAC focused on Digital Infrastructure. As is British entrepreneur and Former Telecity CEO Michael Tobin.

Written by 3 days ago

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