Formed through the 2017 carve-out of CenturyLink’s (now Lumen) data center and colocation business, Cyxtera has grown to become the largest privately held data center provider of retail colocation services globally.
Today, the Company’s footprint of 61 data centers in 29 markets around the world serves more than 2,300 leading enterprises, service providers and government agencies, including Capgemini, Cognizant, Cloudflare, Fujitsu, HPE, Nvidia, and Zenlayer.
Upon completion of the transaction, the combined company will be the third largest publicly held global provider of retail colocation and interconnection services. Cyxtera generated estimated revenues of $690 million and Adjusted EBITDA of $213 million in 2020, its first full year of stable operations following the completion of the carve-out, with a plan to drive significant revenue and EBITDA growth in the future.
Cyxtera provides an innovative suite of deeply connected and intelligently automated infrastructure and interconnection solutions to enterprise customers and leading service providers around the world – enabling them to scale faster, meet rising consumer expectations, and gain a competitive edge. As an industry leader with a presence in each of the world’s top 101 most important data center markets,
SVAC is sponsored by an affiliate of Starboard Value LP (“Starboardâ€). Starboard has an 18-year history of public market investing, with demonstrated expertise in driving value creation through improved governance, execution, capital allocation, and strategic re-positioning. Starboard has significant experience in the technology sector, including in the digital infrastructure industry.
The merger implies an enterprise value of approximately $3.4 billion. Upon completion of the transaction, including the PIPE described below, the current owners of Cyxtera will retain approximately 58% ownership of the combined company.
The company will receive $654 million of proceeds from a $250 million concurrent private placement of common stock of SVAC (PIPE), priced at $10.00 per share, along with $404 million of cash held in trust, assuming no public shareholders of SVAC exercise their redemption rights.
Certain clients of Starboard have entered into a $100 million forward purchase agreement to offset redemptions, if any. The PIPE includes commitments from institutional investors, including Fidelity Management & Research Company LLC, and clients of Starboard. Proceeds of the transaction will be used to partially retire Company debt and provide incremental cash for growth, as well as to pay transaction expenses.
The proposed business combination has been unanimously approved by the boards of directors of both SVAC and Cyxtera. It is expected to close in mid-2021, subject to customary closing conditions, including the receipt of regulatory approvals, and approval by SVAC’s stockholders. Upon closing of the proposed business combination, the name of Starboard Value Acquisition Corp. will be changed to Cyxtera Technologies, Inc. ■