Colocation firm Cyxtera may put itself up for sale

Datacenter operator with $2.3b value said to be discussing options a year after SPAC merger

Datacenter operator Cyxtera is considering putting itself up for sale, according to reports.

The firm has facilities at 61 locations across North America, Asia Pacific and Europe, including London's Docklands, and is an important player in datacenter colocation and interconnection services.

According to Bloomberg, Cyxtera is said to be exploring strategic options including a sale, and is working with advisors as it considers alternatives open to the company, citing unnamed sources that requested anonymity.

Cyxtera last year completed a merger with Starboard Value Acquisition Corp, a special purpose acquisition company (SPAC), in order to grow and support further strategic go-to-market efforts, the firm stated at the time. The company received approximately $493 million from the transaction before fees, expenses, and debt amortization.

The advisors working with Cyxtera to explore its next options have not been identified, but Citi Group and Morgan Stanley served Cyxtera during last year's merger.

The potential sale could be part of the recent hotting up of the datacenter market. Last year, two massive US datacenter real estate investment trusts, CyrusOne and CoreSite, were acquired in deals worth $15 billion and $10.1 billion respectively. This itself may be in response to a boom in demand for datacenter and colocation space, with record absorption – or uptake of capacity – for the whole of 2021, up 50 percent over 2020, according to a recent report from CBRE.

Last month, Bloomberg also reported that datacenter operator Switch was exploring strategic options including a sale.

More recently, Japanese giant NTT announced a partnership with Australian asset management outfit Macquarie to help it accelerate datacenter builds in Europe and North America.

Cyxtera has a market value of about $2.3 billion, and reported full year total revenue of $703.7 million for 2021, an increase of $13.2 million over the previous year. However, it reported a net loss for the year of $257.9 million. In its guidance for 2022, the firm was expecting to achieve revenue of $730-$760 million, a 4 to 8 percent increase. ®

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