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CenturyLink sells data centre and colocation assets to consortium

Fri 4 Nov 2016

U.S.-based global communications, hosting, cloud and IT services provider CenturyLink has completed an agreement to sell its data centres and colocation business to BC Partners, in a group led by Medina Capital Advisors and Longview Asset Management.

The deal, rumoured in early October, is expected to be finalized in the first quarter of 2017.

CenturyLink will receive $2.15 billion USD, as well as a minority stake in the business valued at $150 million USD.

In return, the BC Partners consortium will assume ownership of the 57 data centres owned by CenturyLink, comprising a portfolio of 2.6 million square feet of capacity, and 195 megawatts of power.

By remaining stakeholder in the business, CenturyLink will continue to offer colocation services to customers, along with network, managed hosting and cloud services, through the BC Partners group.

CenturyLink plans to use the funds garnered from the sale of its data centre and colocation business in part to fund the $34 billion USD purchase of Level 3 Communications, announced earlier this week.

The acquisition of Level 3 helps CenturyLink to become a stronger competitor to corporate giants such as AT&T in the business services arena. CenturyLink will also have access to Level 3’s advanced network security products, which it can use to strengthen its portfolio of service offerings.

The Level 3 deal also gives CenturyLink access to Level 3’s current customer base. Level 3, as a major provider of internet services, counts among its customers web giants Netflix Inc. and Google, who use Level 3 to route internet traffic.

CenturyLink has grown from a small, local telephony provider to a global communications leader due in part to well-timed, intelligent acquisition decisions. The 2010 acquisition of Qwest communications, for example, helped to grow the telephony and internet business, while the 2011 acquisition of Savvis, Inc. allowed CenturyLink to gain ground as a global IT and cloud services provider.

In 2016 alone, CenturyLink expanded managed security service offerings through the purchase of netAura LLC, and strengthened cloud services with the acquisition of ElasticBox.

Manny Medina, head of Medina Capital and one of the leaders of the BC Partners consortium, also announced that Medina Capital and BC Partners are using the CenturyLink business to form the backbone of a new $2.8 billion data centre and cybersecurity company to be based out of Miami, FL.


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