CenturyLink says multiple parties are interested in its data center business
CenturyLink (NYSE: CTL) may have not made a final decision on whether it will sell all of its data centers or retain part of them, but a top company official confirmed a number of parties are interested in the assets.
Speaking to investors during the company's fourth quarter earnings call, Glen Post, CEO and president, reiterated that it is considering a number of options for the data center business.
CenturyLink also created a separate data center/colocation organization, including a separate management team.
"We spoke to a number of interested parties who expressed interest in all options ranging from an outright purchase of our data centers and colocation business, a partnership and/or a joint venture," Post said during the earnings call, according to a Seeking Alpha transcript. "This is an ongoing process that could result in any one of these outcomes, including the potential sale of a portion of or all of our data center business."
In November, CenturyLink told investors during its third quarter earnings call the same thing: that it was looking at various opportunities for its data center and colocation business operations and considering a number of options for this segment. The provider could also keep some or all of these assets and operations as part of CenturyLink's portfolio.
If it does establish a joint venture for its data center business, Post said that the telco would be able to provide data center services to its business customers without the cost of running the assets themselves.
"We think we can drive higher returns by investing those dollars in network and other areas, so that is really our view of that business," Post said. "Not only that, the valuations are significant right now and we think it is a good time."
CenturyLink is among a number of traditional telcos that have been looking at realigning their data center business. Windstream sold its data center business to TierPoint, a data center specialist, for $575 million last October.
Meanwhile, rumors have continued to swirl that Verizon (NYSE: VZ) is looking for a buyer for its data centers. In January, a report emerged in Reuters that the telco has devised a plan to sell its data center business in a potential $2.5 billion deal.
Verizon's colocation assets include 48 data centers, which currently generate earnings of about $275 million. However, no deal has been made yet.
- see the Seeking Alpha transcript
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