• Medina Capital and BC Partners will continue to hold their stakes in the combined entity.
• Cyxtera Technologies had reportedly separated its security business in 2019.

Leading data center solutions provider Cyxtera Technologies has disclosed to have reached the final stage of merger talks with special purpose acquisition company (SPAC) Starboard Value Acquisition Corp. Cyxtera’s valuation is likely to reach USD 3.4 billion following the merger.

Private equity firms including Medina Capital and BC Partners will continue to hold their stakes in the combined entity. It is worth noting that these private equity firms had acquired the CenturyLink colocation business that later became Cyxtera’s worldwide data center platform.

Besides being a leading privately held colocation services provider in the United States, Cyxtera Technologies also became one of the largest in the world in terms of market share after Medina Capital and BC Partners combined CenturyLink’s data centers with four other cybersecurity and analytics firms.

This allowed Cyxtera to offer rare and innovative services, predominately specializing in security software, sources claimed.

However, the company had separated its security business in 2019. During this time, CEO Nelson Fonseca claimed that the decision was made to maximize benefit among investors at a time when valuations of security companies were substantial.

SPACs are basically a shell company that raises funds and uses it to conduct acquisitions. Such entities have been gaining quite the recognition since the COVID-19 pandemic, as they take on the name of the specific company it acquired, further allowing it to go public.

A special purpose acquisition company offers investors an alternative to raising funds relatively easier as compared to a traditional IPO. Several data centers, as well as digital infrastructure businesses, have been attracting SPAC attention.

Source Credits –

https://www.datacenterknowledge.com/deals/data-center-provider-cyxtera-close-34b-starboard-spac-merger-wsj