CyrusOne CEO Resigns; Data Center Business Up for Sale?

CyrusOne President and CEO Gary Wojtaszek has resigned amid a weaker-than-expected financial forecast from the data center REIT (real estate investment trust). Tesh Durvasula will serve as CyrusOne's interim president and CEO, amid rumors that the data center provider is up for sale.

CyrusOne has retained Morgan Stanley to explore a potential company sale, joint venture and/or other opportunities, Bloomberg reported earlier this month. The data center provider's market cap is $7.4 billion as of February 20, 2020. EQT and Digital Colony in 2019 were reportedly working together on potential joint bid for CyrusOne, but no deal materialized.

CyrusOne CEO Exits After Earnings Announcement

Fast forward to present day. Wojtaszek stepped down by mutual agreement with the board. The board is now conducting a search for a permanent CEO. The search will include consideration of Mr. Durvasula as well as external candidates, the company said.

CyrusOne's revenue was $253.9 million for Q4 2019, up 15 percent from Q4 2018, the company disclosed on February 19, 2020. The data center provider had a net loss of $52.1 million in Q4 2019, smaller than a net loss of $105.8 million in Q4 2018.

Strangely, ChannelE2E does not believe the CEO transition was mentioned in yesterday's earnings release -- which may suggest Wojtaszek and the board had a strong difference of opinion about business matters within the past 24 hours or so.

Data Center Mergers and Acquisitions

CyrusOne has been a buyer in the data center industry, acquiring Zenium for a lofty 18X EBITDA multiple in 2017, and Sentinel Data Centers for 14.4 times pro forma EBITDA that same year.

ChannelE2E has tracked at least six data center M&A deals so far in 2020. Buyers have included Park Place Technologies, Macquarie Group, Equinix (two deals), CentriLogic and Maple Tree Investments, among others.  Track our complete Technology Mergers and Acquisitions Deal List for 2020 here.