CenturyLink strikes deal for $2.3bn data centre sale

4 Nov 201631 Shares

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CenturyLink. Image: Ken Wolter/Shutterstock

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Telecoms giant CenturyLink has agreed the sale of 57 data centres around the world for over $2bn, as it seeks a secure footing for the upcoming merger with Level 3 Communications.

A consortium led by BC Partners and Medina Capital has signed a deal with US telecoms company CenturyLink, securing its data centres and colocation business for $2.15bn.

Beyond the money, which will be used to help fund the purchase of Level 3 Communications, CenturyLink will receive a stake in the consortium’s “newly formed, global secure infrastructure company”, worth an additional $150m.

CenturyLink

CenturyLink hopes that shedding its data centre infrastructure, while buying up Level 3 to the tune of $34bn, will reposition its business to aid its plan of “connecting people” to the modern world.

At the moment, CenturyLink operates data centres that provide broadband, voice, video, data and managed services in Europe, North America and Asia.

Under terms of the agreement, BC Partners will assume ownership of 57 data centres, which includes approximately 195MW of power across 2.6m sq ft of raised floor capacity.

CenturyLink’s entire business is in flux at the moment, as one of the industry’s biggest mergers nears completion.

Wall Street has had some major corporate mergers and takeovers of late, with the recent move by AT&T to purchase Time Warner for the princely sum of $85bn. Now, CenturyLink and Level 3 want to join in on the action.

The decision for both companies to merge will create a telecoms giant worth around $50bn, whereby CenturyLink’s broadband network would be combined with Level 3’s enterprise services.

The end result will be a single entity that could help their corporate clients gain greater bandwidth and an infrastructure to handle vast quantities of data, which market analysts have valued as high as $100bn in annual revenues in the US.

“The digital economy relies on broadband connectivity, and together with Level 3, we will have one of the most robust fibre network and high-speed data services companies in the world,” said Glen Post, CenturyLink CEO and president.

“This transaction furthers our commitment to providing our customers with the network to improve their lives and strengthen their businesses.

“It is this focus on providing fibre connectivity that will continue to distinguish CenturyLink from our competitors.”

CenturyLink. Image: Ken Wolter/Shutterstock

Gordon Hunt is a journalist at Siliconrepublic.com

editorial@siliconrepublic.com