Dive Brief:
- Investment firm BC Partners is the lead bidder for CenturyLink’s data center business, according to a Reuters report.
- Another private equity consortium looking to bid on the data centers failed to submit a bid.
- Unidentified sources told Reuters that CenturyLink hopes to divest its 59 colocation data centers for approximately $2.5 billion.
Dive Insight:
Telecommunications companies are looking to unload data centers they once viewed as lucrative assets. Last week, reports surfaced that Verizon is considering selling its 14 cloud data centers in a deal that could be worth $3.5 billion. Sources said data center operator Equinix is likely the buyer, though Verizon declined to comment.
Like Verizon, CenturyLink is looking to shed data center assets acquired in 2011. CenturyLink bought data hosting company Savvis for $2.5 billion that year. Verizon thesame year acquired most of the data centers through its $1.4 billion purchase of Terremark Worldwide.
Selling data centers can prove challenging because they companies have to separate assets that are thoroughly integrated into telecommunications networks, according to the report.
But as telecom companies look to streamline their offerings — particularly in areas where industry giants have larger investments — it appears data centers may be among the first things to go.
