BC Partners’ Cyxtera merges with Starboard Value Acquisition Corp.

Cyxtera was formed through the 2017 carve-out of CenturyLink’s (now Lumen) data center and colocation business.

Cyxtera has agreed to a business combination with Starboard Value Acquisition Corp., implying a $3.4 billion enterprise value. Cyxtera, a data center provider of retail colocation services, is owned by BC Partners.


MIAMI & NEW YORK–(BUSINESS WIRE)–Cyxtera Technologies, Inc. (“Cyxtera” or the “Company”), a global leader in mission-critical retail colocation and interconnection services, and Starboard Value Acquisition Corp. (“SVAC”) (NASDAQ: SVAC), a publicly traded special purpose acquisition company, announced the signing of a definitive business combination agreement today.

Formed through the 2017 carve-out of CenturyLink’s (now Lumen) data center and colocation business, Cyxtera has grown to become the largest privately held data center provider of retail colocation services globally. Today, the Company’s footprint of 61 data centers in 29 markets around the world serves more than 2,300 leading enterprises, service providers and government agencies, including Capgemini, Cognizant, Cloudflare, Fujitsu, HPE, Nvidia, and Zenlayer. Upon completion of the transaction, the combined company will be the third largest publicly held global provider of retail colocation and interconnection services. Cyxtera generated estimated revenues of $690 million and Adjusted EBITDA of $213 million in 2020, its first full year of stable operations following the completion of the carve-out, with a plan to drive significant revenue and EBITDA growth in the future.

Cyxtera provides an innovative suite of deeply connected and intelligently automated infrastructure and interconnection solutions to enterprise customers and leading service providers around the world – enabling them to scale faster, meet rising consumer expectations, and gain a competitive edge. As an industry leader with a presence in each of the world’s top 101 most important data center markets, Cyxtera delivers world-class performance, security, and reliability to its customer base, while also providing flexible solutions that meet their evolving IT infrastructure needs in hybrid IT environments. The Company’s API-driven, carrier-neutral platform is ideally suited to deliver a future-ready, extensible, scalable, and interconnected data center experience.

SVAC is sponsored by an affiliate of Starboard Value LP (“Starboard”). Starboard has an 18-year history of public market investing, with demonstrated expertise in driving value creation through improved governance, execution, capital allocation, and strategic re-positioning. Starboard has significant experience in the technology sector, including in the digital infrastructure industry. Starboard’s partners have directly served on the boards of more than 30 public portfolio companies, overseeing numerous business transformations and partnering with management teams to drive substantial value creation. In addition to its expertise in public company governance and driving long-term value creation, Starboard’s ability to leverage its broad networks, relationships, and perspectives on behalf of the Company makes SVAC an ideal partner for Cyxtera as the Company embarks upon the next phase of its journey.

“In 2017 we identified a huge opportunity – a premium portfolio of high-quality data center assets with the potential to become a leading global provider in the highly attractive retail colocation market,” said Manuel D. Medina, Executive Chair of Cyxtera and Founder and Managing Partner of Medina Capital. “Nearly four years later, not only has our experienced team successfully deployed new core systems, a new salesforce and a new brand, we have implemented our strategy to provide deeply connected and intelligently automated infrastructure solutions to businesses around the world. Now, as a new Cyxtera enters its growth chapter, we’re thrilled to partner with Jeff Smith and the SVAC team. In addition to helping accelerate our growth along multiple vectors, Starboard’s deep expertise across corporate governance, operational excellence, and capital allocation will immediately benefit us as a public company, as we drive long-term value creation.”

“At Cyxtera we’ve built a data center platform that’s ideally positioned to deliver the type of differentiated solutions that enterprises, service providers, and government customers require to meet their ever-changing infrastructure needs,” said Nelson Fonseca, CEO of Cyxtera. “By merging with SVAC, we are able to accelerate our plans to drive high-margin growth by increasing utilization of our existing assets, developing innovative product offerings, and expanding our global footprint. Our management team’s experience in successfully building and operating a publicly traded data center company with a significant presence in international markets ensures that the additional capital will be efficiently allocated to effectively build on our world-class platform, accelerate growth, and create long-term shareholder value.”

Jeff Smith, Chair of SVAC and CEO of Starboard, said, “Cyxtera is at an exciting inflection point, poised for significantly improved growth and profitability in an industry with powerful secular tailwinds. Cyxtera’s world-class team, led by Manny and Nelson, has built a high-performance, trusted, and reliable global platform, without losing their customer focus or passion for innovation. Cyxtera is exactly the kind of opportunity we were targeting when we created SVAC. We look forward to partnering with the Cyxtera and BC Partners teams to grow the Company and create value for our shareholders, employees, customers, and partners.”

“As part of the original investment group that helped launch Cyxtera, we’ve been firm believers in the power of Cyxtera’s model and the Company’s growth potential since its founding,” said Fahim Ahmed, Partner at BC Partners. “Cyxtera offers a powerful combination of a global platform in top-tier markets, a blue-chip customer base, innovative service offerings, and dynamic partner ecosystems. This merger with SVAC enhances the leadership team’s ability to deliver innovative solutions to clients and expands the scale of Cyxtera’s opportunity.”

The Company’s leadership, including Executive Chair Manuel D. Medina, CEO Nelson Fonseca, COO Randy Rowland, and CFO Carlos Sagasta, will continue to lead Cyxtera, with Mr. Medina and Mr. Fonseca also serving on the board of the combined company as Chair and Director, respectively. SVAC Chair Jeff Smith and Industry Advisor Greg Waters will join the combined company’s board as Independent and Lead Independent Directors, respectively, upon completion of the merger. BC Partners’ Partner, Chairman, and Chairman of the Executive Committee Raymond Svider and Partner Fahim Ahmed will also serve on the combined company’s board.

Transaction Overview

The merger implies an enterprise value of approximately $3.4 billion. Upon completion of the transaction, including the PIPE described below, the current owners of Cyxtera will retain approximately 58% ownership of the combined company. The combined company will operate as Cyxtera and expects its common stock to be listed on The Nasdaq Stock Market (the “Nasdaq”) under the symbol “CYXT” and its warrants under the symbol “CYXTW.”

The company will receive $654 million of proceeds from a $250 million concurrent private placement of common stock of SVAC (PIPE), priced at $10.00 per share, along with $404 million of cash held in trust, assuming no public shareholders of SVAC exercise their redemption rights. Certain clients of Starboard have entered into a $100 million forward purchase agreement to offset redemptions, if any. The PIPE includes commitments from institutional investors, including Fidelity Management & Research Company LLC, and clients of Starboard. Proceeds of the transaction will be used to partially retire Company debt and provide incremental cash for growth, as well as to pay transaction expenses.

The proposed business combination has been unanimously approved by the boards of directors of both SVAC and Cyxtera. It is expected to close in mid-2021, subject to customary closing conditions, including the receipt of regulatory approvals, and approval by SVAC’s stockholders. Upon closing of the proposed business combination, the name of Starboard Value Acquisition Corp. will be changed to Cyxtera Technologies, Inc.

Additional information about the proposed transaction, including a copy of the business combination agreement and investor presentation, will be provided in a Current Report on Form 8-K that will contain an investor presentation to be filed by SVAC with the Securities and Exchange Commission and available at www.sec.gov.


Citi served as lead financial advisor to Cyxtera. Morgan Stanley & Co. LLC served as financial advisor to Cyxtera, and J.P. Morgan served as financial advisor to Cyxtera and BC Partners. Latham & Watkins LLP served as legal advisor to Cyxtera and BC Partners.

UBS Investment Bank, Stifel, Nicolaus & Company, and Cowen and Company, LLC served as capital markets advisors to Starboard Value Acquisition Corp. Akin Gump Strauss Hauer & Feld LLP served as legal advisor to Starboard Value Acquisition Corp. Hughes Hubbard & Reed LLP served as legal advisor to SVAC Sponsor LLC.

J.P. Morgan Securities LLC served as lead placement agent with Citi, RBC Capital Markets, LLC and UBS Investment Bank as co-placement agents on the PIPE.

Investor Conference Call Information

Cyxtera and SVAC will host an investor call and presentation to discuss the transaction at 8:30 AM ET today, Monday, February 22, 2021.

A live, listen-only webcast of the call will be available at the following link: https://services.choruscall.com/links/cyx210222.html. Investors interested in accessing the conference call can dial +1-866-777-2509 (United States toll-free) or +1-412-317-5413 (International).

Participants are encouraged to pre-register for the conference call using the following link: https://dpregister.com/sreg/10152646/e338f1c1e8. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.

A replay of the webcast will be available until May 22, 2021, on Cyxtera’s investor relations page at https://www.cyxtera.com/about-us/investor-relations.

About Cyxtera

Cyxtera is a global data center leader in retail colocation and interconnection services. The company operates a footprint of 61 data centers in 29 markets around the world, providing services to more than 2,300 leading enterprises, service providers, and U.S. federal government agencies. Cyxtera brings proven operational excellence, global scale, flexibility, and customer-focused innovation together to provide a comprehensive portfolio of data center and interconnection solutions. For more information, please visit www.cyxtera.com.

About Starboard Value Acquisition Corp.

Starboard Value Acquisition Corp. is a blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company’s sponsor, SVAC Sponsor LLC, is an affiliate of Starboard Value LP. For more information, please go to StarboardSVAC.com.

About BC Partners

BC Partners is a leading international investment firm with over $40 billion of assets under management in private equity, private credit, and real estate. Established in 1986, BC Partners has played an active role in developing the European buy-out market for three decades. Today, BC Partners executives operate across markets as an integrated team through the firm’s offices in Europe and North America.

Since inception, BC Partners Private Equity has completed 119 private equity investments in companies with a total enterprise value of over $180 billion and is currently investing its 11th private equity fund. For more information, please visit www.bcpartners.com.

About Medina Capital

Medina Capital is a private equity firm investing growth capital in innovative companies in the cybersecurity, data analytics, cloud infrastructure, and software-as-a-service markets. Medina Capital’s philosophy emphasizes finding high-growth companies with established products that will benefit from the strategic guidance of the firm’s experience and expertise in the technology sector. For more information, please visit www.medinacapital.com.