CenturyLink has sold its data center portfolio to an investor consortium for $2.15 billion, and will will use the proceeds to help fund its acquisition of Level 3 Communications, the company said today.
The deal marks a return to the data center industry for Manuel Medina, who previously built Terremark into a major player on the national data center scene before selling it to Verizon. Medina is heading an investor consortium including Partners and Longview Asset Management, as well as his Medina Capital Management. CenturyLink will maintain a stake in the new entity, valued at about $150 million.
The BC Partners/Medina-led consortium will assume ownership of CenturyLink’s portfolio of 57 data centers, with 195 megawatts of power across 2.6 million square feet of raised floor capacity. The deal is expected to close in the first quarter of 2017. Branding for the new company will be announced at a later date.
The new entity will lead with cybersecurity, combining the CenturyLink data center assets with Medina Capital’s portfolio of security and software firms. This is a strength for Medina, whose focus on cybersecurity helped Terremark build a lucrative business hosting IT services for the U.S. military and government agencies.
A Secure Data Center Platform
“We’re combining a worldwide footprint of best-in-class data centers with cutting-edge security and analytics services, integrating these capabilities into a global, highly secure platform,” said Medina. “Our customers will be able to leverage a suite of on-net security and advanced analytics services deeply integrated into the data center.”
“Led by Manny Medina and his management team at Medina Capital, these data centers 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,” said Justin Bateman, a managing partner at BC Partners. “”CenturyLink has built and maintained an impressive global footprint of colocation data centers that is unparalleled for a portfolio of assets of this size.”
Although it will no longer own the data centers, CenturyLink will continue to offer colocation services as part of its product portfolio through its commercial relationships to be entered into at closing with the BC/Medina-led consortium.
“After conducting a thorough review process, we are pleased to have reached an agreement with BC Partners,” said Glen Post III, chief executive officer and president of CenturyLink. “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.”
Lots of Terremark Veterans
Medina’s team at Medina Capital is stacked with veterans of Terremark, including former COO Nelson Fonseca, sales leader Barry Field, cloud services executive Randy Rowland, and controller Rene Rodriguez.
Medina founded Terremark with a vision for a data center that would make south Florida the gateway to Latin America for internet connectivity. In 2000 the company built The NAP of the America, one of the world’s largest data centers, just as the dot-com boom was receding. Medina guided Terremark through a long period of financial challenges, but gained momentum by sharpening its focus on security and virtualization services, which were just emerging as a major tool for IT operations.
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BC Partners is a “Pan-European” buyout firm with offices in London, Paris, Hamburg and New York, and is currently advising funds totaling over €12 billion. The company has completed 92 transactions with a total enterprise value of €115 billion. About Longview Asset Management is a wealth mangement firm that invests assets on behalf of individuals, trusts, and charitable foundations associated with a private family.