Silver Lake may sell Vantage Data Centers, says report

A data center

Private equity firm Silver Lake Partners is mulling a sale of Silicon Valley-based Vantage Data Centers. Citing anonymous sources, Reuters reported that Silver Lake Partners hopes to fetch over $1 billion, including debt, for Vantage data center assets.

Vantage has built out data center campuses in Santa Clara, California, and Quincy, Washington, but a big focus of its recent expansion efforts have been centered on Santa Clara.

According to Reuters, sources said that Silver Lake has tapped Royal Bank of Canada and DH Capital to conduct an auction for Vantage.

Although a number of strategic and financial investors have expressed interest in Vantage’s assets, Silver Lake might abandon a sale if it does not get any appealing offers.

Silver Lake would not comment to Reuters on any talks, while Vantage Data Centers, Royal Bank of Canada and DH Capital did not respond its request for comment.

The data center market has become a hot topic as CenturyLink and Verizon have been looking for suitors for their data center assets.

Verizon, according to a recent Cowen & Co. research note, is close to selling its data centers to Equinix, a data center specialist, for nearly $3.5 billion. The provider’s desire to sell these assets is a sign that Verizon wants to sharpen its focus on its more profitable wireless and fiber-based business lines.

Fran Shammo, Verizon’s outgoing CFO, told investors during the telco's second quarter earnings call that it would make a decision in the third quarter about the future of the data center business.

Likewise, CenturyLink said that it is in final discussions with a number interested parties for its data centers and hopes to get a deal done by the end of the third or fourth quarter.

More recently, a report emerged that a group of four private equity firms have created an alliance to purchase CenturyLink's data center assets for $2.5 billion.

By selling its data center business, CenturyLink said it could not only reduce operational costs, but also have more money to invest in areas like broadband and network virtualization.

For more:
- Reuters has this article

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