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CenturyLink Likely to Sell Data Centers Soon

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Four private-equity firms reportedly have formed an alliance to bid on CenturyLink’s data centers.

GTCR, Charlesbank Capital Partners, Berkshire Partners and Stonepeak Infrastructure Partners have teamed up to try to buy the data centers from CenturyLink, according to a Reuters report.

CenturyLink also has talked with other bidders, including companies already in the data-center sector and investment firm BC Partners, according to Reuters.

CenturyLink issued the following statement regarding the report:

“As we stated in our second-quarter earnings call in early August, our strategic review process continues to progress well and we expect to complete the process by the end of this year. We are exploring a full range of options including, but not limited to, a partnership or joint venture, a sale of all or a portion of the data centers, as well as keeping these assets as part of CenturyLink’s portfolio. During this process, we remain focused on operating our data centers to provide our customers with the high-quality service and support they deserve.”

GTCR, Charlesbank, Berkshire and Stonepeak didn’t respond to requests for comment.{ad}

In January, Stewart Ewing, CenturyLink’s chief financial officer, said after operating the facilities for a few years, CenturyLink decided that “we don’t really have to own the data centers so we’re going to run through a process to see what level of interest is out there and our ability to monetize that asset, and if we can’t we’ll keep it.”

“But we think that if we can monetize it, we can still sell colocation services from a wholesale perspective with whomever we sell the data centers to, or potentially other colocation providers, as well as … continue to be a customer of that business from the standpoint of managed services cages for customers being in those data centers, as well as the cloud pods that are in some of those data centers,” Ewing said.

In March, CenturyLink announced the expansion of its global data center footprint and “leading-edge innovations” for data center hosting services. In 2015, CenturyLink added 14 megawatts of critical capacity at eight data centers, and in the first half of this year it planned to further increase capacity in four data centers.

In the last five years, CenturyLink has completed 39 expansion projects and added 11 new data centers.

This follows a trend of big telcos selling off their data-center assets. Windstream sold its hosting unit to TierPoint a year ago. Verizon has said it’s exploring the sale of its data centers, with a decision expected before the end of the year.


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