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CenturyLink sells datacentre portfolio to private equity consortium

Telco brings an end to months of speculation about its datacentre plans by confirming it has reached a deal to offload 57 sites to BC Partners

CenturyLink will sell its entire datacentre portfolio to private equity consortium BC Partners for $2.15bn in cash to free up funds for its acquisition of Level 3 Communications.

The deal will see the consortium take ownership of all 57 of CenturyLink’s datacentres, but the telco will not be exiting the colocation market as expected as a result of the transaction.

In a statement, the company confirmed that it would continue to offer colocation services, via BC Partners, once the deal is concluded during the first quarter of 2017.

CenturyLink confirmed it would also continue to offer managed hosting, cloud and networking services.

The proceeds of the sale will go towards funding CenturyLink’s $34bn acquisition of Level 3 Communications, which was announced on 31 October.

Glen Post, CEO and president of CenturyLink, said the company was committed to ensuring the transition process would be as smooth as possible for its customers.

“Both CenturyLink and BC Partners have a strong customer focus and are committed to ensuring a seamless transition of the customers and their colocation environments,” he said.

Justin Bateman, a managing partner at BC Partners, credited CenturyLink with creating an “impressive” global footprint of colocation datacentres, including five in the UK.

Read more about datacentre M&A

  • Verizon and CenturyLink are reportedly on the cusp of reaching separate agreements to divest their datacentre assets, as both telcos look to exit the increasingly competitive colocation market.
  • The divesture of eight datacentres by colocation giant Equinix may force operators to look further afield for future acquisition targets, as the supply of viable European assets dwindles.

“These datacentres will become part of a new, global, secure infrastructure platform that will meet the growing and changing needs of customers today and for the future,” he said.

“We look forward to working together to offer all the datacentres’ existing customers, as well as new customers, unrivalled datacentre and colocation services.”

Reports linking the two parties to a possible sale emerged early last month, just under a year after CenturyLink first announced plans to sell off its datacentre portfolio, during the publication of its third-quarter results.

At the time, CenturyLink said the move was motivated by the realisation that growing its colocation businesses would require more capital investment than it was willing to stump up.

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