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CenturyLink Completes $1.86B Data Center Business Sale

CenturyLink CEO Glen Post

Another day, another data center sale. The latest: CenturyLink (CTL) announced today that it has completed the $1.86 billion sale of its cloud data centers and colocation business to a group of funds.

In addition to cash, the telecom company gets a 10 percent stake in the consortium’s newly-formed global infrastructure company, Cyxtera Technologies.

CenturyLink said it would use net after-tax proceeds from the sale to help fund its $34 billion acquisition of Level 3 Communications, which was announced in October and is expected to close in the third quarter of this year.

The news comes the day after Equinix announced the completion of its $3.6 billion all-cash purchase of 29 Verizon data centers. A separate report reveals Verizon has sold certain cloud and managed hosting assets to IBM.

Focus on Network Infrastructure

Both Verizon and CenturyLink are regrouping to focus on network-centric services.

Under terms of the CenturyLink agreement, Cyxtera assumes ownership of CenturyLink’s 57 data centers. Approximately 700 CenturyLink employees will transition to Cyxtera.

The sale frees up the large amount of capital required to run physical data centers so CenturyLink can focus on its network infrastructure and IT services, the company said.

CenturyLink retains its hosting and cloud assets, and it will continue to offer colocation services as part of its hybrid IT offerings through the commercial relationship with Cyxtera.

“This sale allows CenturyLink to drive greater focus on our network infrastructure while still having the ability to sell colocation services in these data centers,” CEO and President Glen F. Post III said in a statement.

Monroe, Louisiana-based CenturyLink now focuses most heavily on network and data systems management, big data analytics, managed security services, hosting, cloud and IT consulting services. The company provides broadband, voice, video, advanced data and managed network services in the U.S. and internationally.

Level 3 Deal

Meanwhile, CenturyLink’s acquisition of Level 3 (LVLT) is moving closer to completion. Shareholders of both companies and several states have approved the deal.

On Friday, CenturyLink announced the leadership team that will run the combined company. Dean Douglas, who currently oversees the channel program, will remain the head of the program post-merger.

The combined companies will leverage CenturyLink’s enterprise footprint and Level 3’s global reach into more than 60 countries. The company will also invest in the “reach and speeds” of its broadband infrastructure for small businesses and consumers, CenturyLink has said.

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