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CenturyLink reported to be selling data centre properties for $2.5 billion

Wed 12 Oct 2016

London-based buyout specialists BC Partners are reported to be advanced in negotiations to acquire data centre properties from CenturyLink for a sum around $2.5 billion.

Reuters reports that the deal is being complicated by the difficulties in identifying and valuing discrete sections of a concern that ranges from the concrete (data centre installations and equipment) to the abstract (networking, provisioning and other telco-based assets).

Though these intricacies can be hard to navigate, they’re not unusual in deals which involve the outright purchase of data centre concerns. However, the BC/CenturyLink deal is further hindered by the necessary renegotiation of existing leases with Digital Realty Trust.

The sources behind the buyout claim are anonymous, but CenturyLink responded:

“As we stated in our second-quarter earnings call in early August, our strategic review process continues to progress well and we expect to complete the process by the end of this year.”

CenturyLink, established in 1968, has a data centre portfolio of 55 colocation properties around the world, with 25 located in the United States, and runs at an operating income of $2.6 billion and a net income of $878 million, by the most recent estimates.

BC Partners, with a net worth of $17 billion and 5 operations centres in Europe and the United States, has catholic tastes in acquisition, though it has been concentrating more on infrastructure and technology in recent years, with the $700 million purchase of Phones4U in 2011, and a leveraged buyout for $6.5 billion of Suddenlink, the seventh largest cable communications system operator in the United States, the following year.

The company beat out competing bidders in the wake of a private equity consortium between Charlesbank Capital Partners LLC, Stonepeak Infrastructure Partners, GTCR LLC and Berkshire Partners LLC.


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