Starboard Value Acquisition, a special purpose acquisition company (SPAC), is merging with data center company Cyxtera in a deal valued at $3.4 billion, the companies confirmed this morning. Cyxtera’s existing owners, including private-equity firms BC Partners and Medina Capital, are rolling their equity stakes into the combined company.
This is M&A deal number 131 that ChannelE2E has covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.
Cyxtera-Starboard SPAC Merger: Data Center Business Valuation Revealed
Cyxtera generated estimated revenues of $690 million and Adjusted EBITDA of $213 million in 2020. The deal is therefore valued at roughly 15.9 times Adjusted EBITDA.
Cyxtera's leadership, including Executive Chair Manuel D. Medina, CEO Nelson Fonseca, COO Randy Rowland, and CFO Carlos Sagasta, will continue to lead the business. The business will operate as Cyxtera, and its stock will be listed on the Nasdaq Stock Market under the symbol $CYXT.
This is the latest in a growing list of SPAC M&A deals, in which "blank check" shell companies raise money, launch IPOs and merge with established businesses.
- ChannelE2E is tracking dozens of technology-focused SPACs here.
- The latest SPAC moves include Michael Dell and several financial peers forming a SPAC.
Amid all the activity, some pundits believe we’re heading toward a SPAC bubble — which involves too much money potentially flowing to lower-quality companies that perhaps shouldn’t be publicly held.
Cyxtera Data Center Business Background, Executive Statements
Cyxtera was formed in 2017 when CenturyLink sold its data center and colocation business to focus on network services. At the time, Cyxtera had 57 data centers. Today, the business spans 61 data centers in 29 markets around the world. The company serves more than 2,300 enterprises, service providers and government agencies, including Capgemini, Cognizant, Cloudflare, Fujitsu, HPE, Nvidia, and Zenlayer, according to Cyxtera's press release.
In a prepared statement about the SPAC-Cyxtera deal, Manuel D. Medina, executive chair of Cyxtera and founder and managing Partner of Medina Capital, said:
“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. 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.”
Added Nelson Fonseca, CEO of Cyxtera:
“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. 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.”
Noted Jeff Smith, chair of SVAC and CEO of Starboard:,
"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.”
Concluded Fahim Ahmed, partner at BC 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. 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.”
Cyxtera is based in Coral Gables, Florida.
