Struggling Cyxtera is close to selling a large part of itself to multinational investor Brookfield.
Citing unnamed people ‘familiar with the matter,’ Bloomberg reports the recently-bankrupt company is in “advanced talks” to sell a large swath of its data centers to Brookfield Infrastructure Partners, which has already bought two other data center operators this year alone.
Negotiations are reportedly continuing but could still fall apart.
Cyxtera filed for Chapter 11 in early June as it struggled with more than a billion dollars in debts, many of which were long-term debts set to mature over the next year.
The company has been looking at selling itself or bringing on board new investors as part of the bankruptcy process. As many as six parties were said to be previously seriously looking at acquiring its assets, though the interested buyers weren’t named.
Previous reports suggest both Brookfield and Digital Realty were interested in acquiring Cyxtera assets.
All of the companies involved declined to comment to the publication.
Cyxtera has scheduled a November 6 hearing to confirm its bankruptcy plan.
2023 has seen Brookfield acquire Data4 and Compass Datacenters. Brookfield Asset Management jointly owns data center ventures with Digital Realty in India (BAM Digital Realty/Digital Connexion) and Latin America (Ascenty), and also owns DCI Data Centers in Australia/New Zealand. Brookfield Infrastructure Partners also owns US-based Evoque, which we profiled in the latest magazine.
Formed out of CenturyLink’s colocation business, Cyxtera went public via a SPAC in 2021. The company combined with the Nasdaq-listed Starboard Value Acquisition Corp. (SVAC) in a $3.1bn deal. However, within a year, the company was rumored to be looking to go private again, but has been unable to find a company to acquire it. Reports that it was again looking for a buyer surfaced earlier this year as its debt matured.
Prior to the bankruptcy, the colo firm operated more than 60 facilities totaling more than 245MW across 29 markets globally - with the majority of its portfolio leased.
Cyxtera is a tenant of facilities owned by the likes of Keppel, Digital Realty and its Digital Core REIT, and Mapletree Industrial Trust. Other data center creditors include IPI, Menlo Equities, Iron Mountain, and Sabey.
Since the filing, it has rejected leases at two Prime-owned data centers in Silicon Valley, as well as at a Stack-owned data center in Elk Grove, Illinois, and more facilities in Washington and Amsterdam.