06-01-2016, 15:00 #1
[EN] Verizon prepara venda da Terremark
The so-called 'colocation' portfolio up for sale includes 48 data centers.
Verizon Communications Inc has started a process to sell its data center assets, hoping to fetch more than $2.5 billion, people familiar with the matter said on Tuesday, as the U.S. telecommunications conglomerate focuses on its core business.
A sale would represent the latest effort by Verizon, the No. 1 U.S. wireless carrier, to streamline its portfolio following a divestment last year of a chunk of its landline business and a portfolio of wireless towers.
It would also mark a reversal of its strategy to expand in hosting and colocation services after it acquired data center operator Terremark Worldwide Inc in 2011 for $1.4 billion.
The so-called 'colocation' portfolio up for sale includes 48 data centers, and generates annual earnings before interest, tax, depreciation and amortization of around $275 million, one of the people said.
Citigroup Inc is advising Verizon on the possible sale of its data centers, the people added.
The sources asked not to be identified because the auction is confidential. Verizon and Citigroup declined to comment.
Verizon initially explored a sale of a larger portion of its enterprise business, including the former MCI assets, but could not reach an agreement with a buyer. It held discussions with wireline provider CenturyLink Inc last year for its enterprise business, Reuters reported in November.
The enterprise telecommunications industry has had to adapt in recent years to corporate customers seeking more sophisticated and cheaper offerings to manage their data. Verizon joins a host of its rivals in telecommunications who are shedding their data centers.
AT&T Inc has been exploring a sale of its data center assets since last year, while CenturyLink announced in November 2015 that it was exploring strategic alternatives for its data centers. Windstream Holdings Inc (WIN.O) also sold its data center business for $575 million to TierPoint last year.
Verizon has been facing stiff competition from companies such as T-Mobile US Inc TMUS.N and Sprint Corp, which have been offering deep discounts on cellphone and data plans.
(Reporting by Greg Roumeliotis and Liana B. Baker in New York; Additional reporting by Malathi Nayak in New York; Editing by Bernard Orr)
06-01-2016, 15:01 #2
Verizon Puts Its Colo On the TableJanuary 6th, 2016 by Rob Powell
Reports this morning say that Verizon has done what they've been rumored to be considering for much of 2015. They've apparently started a process to sell the company's data center assets. With Citigroup advising, they hope to monetize some 48 facilities with a target of more than $2.5B.
That may sound like a bundle, but Verizon paid $1.4B for Terremark alone four years ago when the company had just $330M in annual revenues with three main locations. The idea at the time was to take a running start at the emerging cloud opportunity. They combined it with their own data center portfolio and put some significant money behind its expansion. Today Verizon's data center business apparently has EBITDA of some $275M,.
We don't exactly know the dividing line between what is for sale and what is not, but it has been apparent that the opportunity Verizon was chasing never really blossomed the way they hoped. Tech giants like Amazon and Google sucking most of the oxygen out of the air on the public cloud side, and few telcos ever really found their footing in the cloud. That doesn't mean the colo business itself isn't good, but telco colocation has never gotten the same respect that similar carrier neutral facilities have. And so, many large telecom providers have soured on the whole idea, especially incumbents with more interesting wireless businesses to invest their resources in.
In November, Verizon was linked to further rumors that it is considering selling off its global networking arm as well. The Reuters report this morning suggests that they did hold talks with CenturyLink about selling that, but nothing came of it. Yet anyway... I suspect we have not heard the last of the idea. They're in the process of selling their ILEC footprints outside the northeastern corridor to Frontier. Will we really see Verizon strip itself all the way down to a national wireless network with an incumbent FIOS territory? It was not so long ago that the reassembly of Ma Bell was nearly complete...
As for who might buy Verizon's data center assets and business, speculation will surely fall on the usual suspects. That would be the carrier neutral data center REITs, possibly backed by private equity. Equinix and Digital Realty would head the list, but any number of a dozen or more others could step into the ring - CoreSite, DuPont Fabros, QTS, Tierpoint, CyrusOne, etc. There's no need for Verizon to sell it all in one bloc either. It would be relatively easy to break it up to maximize value.
06-01-2016, 15:15 #3
DuPont Fabros: Piscataway à venda
DFT plans to use any funds generated from the sale of NJ1 to partially fund its expansion into the new markets contemplated by its strategic plan, specifically Toronto, Portland or Phoenix.
DUPONT FABROS TECHNOLOGY, INC. ANNOUNCES PLAN TO MARKET NJ1 DATA CENTER FACILITY
WASHINGTON, Jan. 05, 2016 (GLOBE NEWSWIRE) -- DuPont Fabros Technology, Inc. (NYSEFT, news, filings) today announced that it plans to market its NJ1 data center facility for sale.
“DFT’s recently presented strategic plan details our focus on wholesale data center development and operations in targeted markets,” said Chris Eldredge, DFT’s president and CEO. “NJ1 is a first-class data center and we have developed many valuable customer relationships during our ownership. NJ1’s location is best suited, however, for more retail-oriented operations. Our plan to exit the New Jersey market with the sale of this property will allow redeployment of capital in target markets that match our objectives for growth and profitability. We will continue to provide NJ1’s customers with the data center solutions that they have come to expect while we look for a buyer who can take advantage of the opportunities offered by this premier facility.”
NJ1, located in Piscataway, New Jersey, is an approximately 360,000 gross square foot facility that is comprised of two phases. NJ1 Phase I contains approximately 88,000 square feet of raised floor area, and has 18.2 megawatts of critical load power available for use by customers. NJ1 Phase II is available for future development. The Company has leased 52% of the available critical load power and 70% of the available raised floor area in NJ1 Phase I.
As of result of implementing this marketing plan, the Company expects to incur a fourth quarter 2015 impairment charge between $115 million and $135 million. This charge will lower the book value of NJ1 to its estimated fair value. Although this charge will lower earnings per share by $1.41 to $1.66, it will not impact Funds from Operations per share, Normalized Funds from Operations per share or Adjusted Funds from Operations per share.
DFT plans to use any funds generated from the sale of NJ1 to partially fund its expansion into the new markets contemplated by its strategic plan, specifically Toronto, Portland, Oregon or Phoenix, Arizona.
06-01-2016, 15:18 #4
DuPont Fabros Plans NJ Exit
DuPont Fabros is making a move away from retail colo, preferring to focus on the largest sort of customer instead.
January 6th, 2016 by Rob Powell
The company says that its NJ1 facility is best suited for the retail business, and therefore will be better utilized by another owner. They'll instead be working on expansion projects in Toronto, Portland, and Phoenix of a more wholesale nature.
NJ1 features some 360,000 square feet of potential space, 88,000 of which was fully built out in the first phase fed by 18.2MW of power available for customers. Some 70% of that space has been leased so far, and they've struggled to fill it relative to their biggest campus down in northern Virginia. In Q3 of 2011 for instance, some 34% of NJ1-phase1 was leased while 8% of ACC6 was leased, but ACC6 was full a year later. DuPont Fabros will take a $115-135M impairment charge in their Q4 2015 results as a result of the move.
As for who might buy the huge, modern facility from DuPont Fabros, any number of candidates springs to mind. Probably a fellow data center REIT, although it doesn't have to be one of the bigger ones. Private equity could definitely play a role as well. Basically, anybody except a large telco like Verizon or AT&T or CenturyLink, as those guys seem to be fleeing the space.
08-01-2016, 11:14 #5
CenturyLink considers wholesale model for data center businessJanuary 7, 2016 | By Sean Buckley
A top CenturyLink (NYSE: CTL) executive said that the provider is considering using its existing colocation facilities to offer wholesale services to businesses and other service provider customers.
Speaking to investors during the Citi 2016 Global Internet, Media & Telecommunications Conference, Stewart Ewing, CFO of CenturyLink, said that CenturyLink might offer customers colocation through a wholesale model if it sells its colocation assets.
"After operating it for a few years, we decided that we don't have to own the data centers so we're going run through a process to see what level of interest is out there and our ability to monetize those assets and if we can't we'll keep them," Ewing said. "We think that if we can monetize it if we can still sell colocation service from a wholesale perspective with whomever we sell the data centers to other colocation providers as well as be a customer of that business for managed services in those data centers and the cloud pods in those data centers."
CenturyLink immediately became a colocation provider through its acquisitions of Qwest, which had 18 data centers, and later Savvis.
However, when CenturyLink purchased Savvis in 2011, the service provider had no intention of expanding the data center business at the same scale of data center specialists like Equinix or Telx. The more valuable part of the business to CenturyLink it gained from Savvis was its managed and cloud services.
"When we bought Savvis we indicated that we really would really not invest in the data center business such that we would be able to grow revenues at the same rates the colocation companies are growing revenue, and we simply did not want to make the investment there," Ewing said. "We bought Savvis mainly for managed services and cloud."
Regardless of any decision about its data center assets, CenturyLink wants to continue providing managed and cloud services.
"We really want to keep the managed services piece and the cloud piece because we think, when we couple that with network and the IT services we provide, it gives us a differentiator between us and some of the other competitors that may have point solutions with having only network or cloud, but not being able to put the whole package together," Ewing said. "As more enterprises and mid-sized customers start moving their infrastructure from their data centers and closets to the cloud, we think we can facilitate that process for our customers and it will give us a differentiator."
CenturyLink told investors during its third quarter earnings call that it was considering various options for its colocation business, including selling its assets and bundling colocation with managed services through a partner. As of this point, it has not made any specific decision about its assets.
Interestingly, CenturyLink's statements come amidst a flurry of activity in the data center space where a number of service providers are realigning their strategies.
Rumors emerged this week that Verizon is going to sell its data center assets in an auction for $2.5 billion, while Windstream recently completed the sale of its data center business to TierPoint.
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