Cincinnati Bell’s CyrusOne to sell 16.5 million shares in IPO
CyrusOne, Cincinnati Bell's (NYSE: CBB) data center business subsidiary, on Tuesday revealed that it will sell 16.5 million shares of its common stock in an upcoming initial public offering (IPO).
Cincinnati Bell said that the shares will be sold by CyrusOne for $16 to $18 each.
Underwriters participating in the IPO will have the option to buy up to 2.5 million additional shares of common stock from CyrusOne at the initial public offering price.
CyrusOne's shares will be listed on the Nasdaq under the symbol "CONE." A date for the IPO has not been set.
When the IPO is completed, Cincinnati Bell will retain a 71.6 percent stake in the new company. It filed IPO papers with the Securities and Exchange Commission (SEC) in August.
Both CyrusOne and Cincinnati Bell have something to gain from the IPO. CyrusOne will get funding to grow its business, as well as repay its outstanding debts to Cincinnati Bell so the telco can invest in emerging areas like its Fioptics broadband and video business and pay off more of its own debt.
Ever since Cincinnati Bell acquired CyrusOne in 2010 for $525 million, the business has been a source of growth at a company that has continued to see its wireline voice revenues decline due to defection to cable and wireless substitution.
In Q3 2012, the telco reported that CyrusOne's revenues rose to $57 million, up $10 million or 20 percent year-over-year from Q3 2011. As it looks to accommodate further growth, CyrusOne added 95,000 square feet of new data center space in the DASH (Dallas, Austin, San Antonio, and Houston) market, increasing total data center capacity to 896,000 square feet.
- see the release
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