Cyxtera, Starboard Aim to Form Publicly Traded Data Services Provider Under $3.4B Merger Deal

Cyxtera Technologies has agreed to join forces with Starboard Value Acquisition Corp. (Nasdaq: SVAC) in an approximately $3.4 billion merger transaction to create a publicly traded data center services provider in the government and commercial markets.

The boards of directors at the two companies unanimously approved the deal and both parties expect to complete the proposed combination in mid-2021, according to a joint statement released Monday.

An investment group comprised of BC Partners, Medina Capital Advisors and Longview Asset Management launched Cyxtera upon their joint acquisition of CenturyLink’s data center and colocation business in 2017.

SVAC operates as a special purpose acquisition company backed by investment advisory firm Starboard Value.

Cyxtera — which posted $690 million in 2020 revenue and $213 million in earnings before interest, taxes, depreciation and amortization last year – runs 61 data centers across the globe.

As part of the agreement, Cyxtera owners will have a 58 percent stake in the combined entity that will seek to list its common stock under the “CYXT” ticker symbol on Nasdaq.

Cyxtera CEO Nelson Fonseca and Chairman Manuel Medina will hold the same positions at the merged organization upon the deal’s closure.

The company estimated that proceeds amounting to $654 million will come from a private investment in public equity plus cash held in trust.

SVAC’s capital market advisers on the transaction were UBS Investment Bank, Stifel, Nicolaus & Co., and Cowen and Co. Akin Gump Strauss Hauer & Feld acted as legal adviser to the corporation.

Latham & Watkins and Citi respectively served as Cyxtera’s legal and lead financial advisers.

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