Lumen Technologies (NYSE: LUMN) will further streamline its portfolio and sell its Europe, Middle East and Africa (EMEA) business to Colt Technology Services, the two companies say. The $1.8 billion that Colt has agreed to pay for the assets represents a multiple of approximately 11 times the business unit’s estimated adjusted EBITDA for 2021. The deal is subject to customary conditions and could close as early as 2023 be completed, the companies estimate.
As part of the sales agreement, the two companies will enter into a partnership, under which Lumen will continue to service EMEA connectivity needs via Colt’s newly expanded network. In the meantime, Colt will leverage Lumen’s network to meet the needs of EMEA-based customers for services outside of EMEA.
The sale includes Lumen’s terrestrial and submarine network assets in EMEA. The company says the transaction will provide additional capital and streamline its portfolio to maintain a strong balance sheet while allowing for more targeted investments to grow the business. Colt will gain additional network resources and strengthen its service portfolio to better serve the needs of enterprise, hyperscale, government and wholesale customers.
The pending sale follows Lumen’s divestiture of 20-state ILEC assets – a transaction that created Brightspeed – and the transfer of Latin American assets to Stonepeak (see “Lumen, Brightspeed Enter ILEC Transfer Agreement” and “Lumen Completes Latin American Business Sale.” Stonepeak to create Cirion”).
“We continue to optimize the portfolio at Lumen and create additional value for our shareholders by monetizing non-strategic assets into value multiples,” said Jeff Storey, President and CEO of Lumen (who is retiring on November 7). “This transaction would strengthen our focus so we can more efficiently invest in our most strategic opportunities – our key corporate and Quantum Fiber initiatives – and work with regional market leaders such as Colt in Europe and Cirion in Latin America to continue serving our multinational enterprise customers. “
“This transaction would mark the next chapter in Colt’s exciting history of global growth and world-class innovation,” said Keri Gilder, CEO of Colt Technology Services. “We are determined to build exceptional connections for our employees, customers and partners across our digital infrastructure. This acquisition would strengthen and expand those connections in existing and new regions, helping us accelerate growth and bring the power of the digital universe closer to our customers.”
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