Transaction will strengthen Lumen's financial
position and sharpen strategic focus
DENVER and LONDON, Nov. 2, 2022
/PRNewswire/ -- Lumen Technologies (NYSE: LUMN) and
Colt Technology Services (Colt), a digital
infrastructure company, announce today they have entered into an
exclusive arrangement for the proposed sale of Lumen's Europe, Middle
East and Africa (EMEA)
business to Colt for $1.8 billion.
This represents a very attractive multiple (~11x) for Lumen's EMEA
business and will create additional value for its shareholders.
More information on this transaction can be found in Lumen's 8-K to
be contemporaneously filed with this release.
The envisaged transaction is subject to customary conditions and
would involve the divestiture by Lumen of its EMEA business,
including its terrestrial and subsea networks, data centers and
network equipment in the region to London-headquartered Colt. Upon completion,
the transaction will further Lumen's strategic focus on investing
in core businesses that are expected to drive long-term, profitable
growth.
Benefits to Lumen:
- Purchase price represents a strong ~11x multiple of the EMEA
business's estimated 2021 adjusted EBITDA.
- Additional capital and a streamlined portfolio will drive more
focused investments on enterprise growth and help maintain Lumen's
strong balance sheet.
- The terms of the transaction enable Lumen to continue to serve
multinational enterprise customers through its strategic
partnership with Colt.
"We are continuing to execute on portfolio optimization at
Lumen, creating additional value for our shareholders by monetizing
non-strategic assets at accretive multiples," said Lumen President
and CEO Jeff Storey. "This
transaction would enhance our focus so we can invest more
efficiently in our most strategic opportunities – our key
Enterprise and Quantum Fiber initiatives – and partner with
regional leaders like 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
story of global growth and world-class innovation," said
Keri Gilder, CEO, Colt Technology
Services. "We're deeply committed to building extraordinary
connections for our people, customers and partners across our
digital infrastructure. This acquisition would strengthen and
extend these connections across existing and new geographies,
helping us to accelerate growth and bring the power of the digital
universe closer to our customers."
Known for its commitment to customer experience and its
industry-leading environmental, social and governance (ESG)
performance, Colt is a global digital infrastructure business with
over 60 offices around the world. The transaction will extend
Colt's infrastructure to new geographic markets, boosting the
services and capabilities it delivers to global enterprises and
strategic partners.
Benefits to Colt:
- Extends Colt's network into additional countries, European
cities and data centers, offering businesses throughout
Europe expanded fiber network
connectivity.
- Offers Colt access to a full range of product solutions for
diversified Enterprise, Hyperscaler, Government and Wholesale
customers.
- Positions Colt to meet growing enterprise and international IP
traffic in EMEA via extensive terrestrial and subsea reach.
Strategic partnership
Most of Lumen's EMEA employees would join Colt after the
transaction closes. Colt and Lumen will establish a strategic
relationship that will enable Lumen to continue delivering a
seamless experience for its multinational customers with needs in
EMEA. The partnership will also allow Colt to continue serving the
needs of the EMEA-based customers with service needs outside of
EMEA.
"Lumen has a strong interest in Colt's success, and we expect to
remain a close business partner and key customer," said Storey.
"Colt's strong reputation and customer focus make them the ideal
partner to serve the needs of our customers, and we expect to
remain Colt's partner of choice for their customers' needs in
North America."
"Colt and Lumen share values, and a drive to deliver outstanding
customer experience," said Gilder. "This combination is powered by
amazing people and incredible infrastructure and is inspired by
technology's ability to change the way we live and work."
Lumen and Colt envisage the transaction would close as early as
late 2023 upon receipt of all regulatory approvals in the U.S. and
certain countries where Colt operates, as well as the satisfaction
of other customary conditions.
The purchase agreement contains various customary covenants for
transactions of this type, including various indemnities and
purchase price adjustments.
Morgan Stanley & Co. LLC is acting as financial advisor to
Lumen in connection with the transaction, and Bryan Cave Leighton
Paisner LLP is serving as legal advisor to Lumen. Evercore Group
L.L.C. is acting as financial advisor to Colt in connection with
the transaction and Baker & McKenzie LLP is serving as legal
advisor to Colt.
About Lumen
Lumen is guided by our belief that humanity is at its best when
technology advances the way we live and work. With approximately
400,000 route fiber miles and serving customers in more than 60
countries, we deliver the fastest, most secure platform for
applications and data to help businesses, government and
communities deliver amazing experiences.
Learn more about the Lumen network, edge cloud, security,
communication and collaboration solutions and our purpose to
further human progress through technology at news.lumen.com/home,
LinkedIn: /lumentechnologies, Twitter: @lumentechco, Facebook:
/lumentechnologies, Instagram: @lumentechnologies and YouTube:
/lumentechnologies. Lumen and Lumen Technologies are registered
trademarks in the United
States.
About Colt
Colt Technology Services (Colt) is a global digital
infrastructure company which creates extraordinary connections to
help businesses succeed. Powered by like-minded partners and
amazing people, Colt is driven by its purpose: to place the power
of the digital universe in the hands of its customers, wherever,
however and whenever they choose.
Since 1992, Colt has set itself apart through its deep
commitment to its customers, growing from its heritage in the
City of London to more than 60
offices around the world. The powerful Colt IQ Network connects 222
cities and 32 countries with more than 1000 data centres, 51
Metropolitan Area Networks and over 31,000 buildings across
Europe, Asia and North
America's largest business hubs. Privately owned, Colt is
one of the most financially sound companies in the
sector.
Obsessed with delivering industry-leading customer experience,
Colt is guided by its dedication to customer innovation, by its
values and its responsibility to its customers, partners, people
and planet.
For more information, please visit www.colt.net
Forward-looking Statements Except for the historical and
factual information contained herein, the matters set forth in this
press release, including statements regarding the expected
transaction proceeds, timing and benefits of the proposed
transactions, and other statements identified by words such as
"estimates," "expects," "projects," "plans," "intends," "will" and
similar expressions, are forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to a number of risks, uncertainties and assumptions, many
of which are beyond our control. Actual events and results may
differ materially from those anticipated, estimated or projected if
one or more of these risks or uncertainties materialize, or if
underlying assumptions prove incorrect. Factors that could affect
actual results include but are not limited to: the ability of the
parties to timely and successfully receive the required approvals
of regulatory agencies; the possibility that the anticipated
benefits from the proposed transaction cannot be realized in the
manner contemplated; the possibility that it may be more difficult
than anticipated to segregate the Company's EMEA business from its
other businesses in connection with the Divestiture; the
possibility that the post-closing commercial relationships between
the parties will not operate in the manner currently contemplated;
the possibility that the Company might be required to pay higher
than anticipated tax payments, to make unanticipated payments under
the transaction agreements or to otherwise receive less net cash
proceeds than anticipated; the possibility that the Company's
customers, vendors or employees could react unfavorably to the
Divestiture; changes in the Company's cash requirements, financial
position or business, operational or financial plans; the effects
of competition from a wide variety of competitive providers; the
purchaser's ability to successfully maintain the quality of its
product and service offerings and to introduce new offerings on a
timely and cost-effective basis; and other risk factors and
cautionary statements as detailed from time to time in the
Company's reports filed with the U.S. Securities and Exchange
Commission. There can be no assurance that the Company's proposed
Divestiture of its EMEA business will in fact be consummated in the
manner described or at all. You should be aware that new factors
may emerge from time to time, and it is not possible for us to
identify all such factors, nor can we predict the impact of each
such factor on the proposed transaction. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Unless legally required, the
Company undertakes no obligation and expressly disclaims any such
obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
Furthermore, any information about our intentions contained in any
of our forward-looking statements reflects our intentions as of the
date of such forward-looking statement, and is based upon, among
other things, regulatory, technological, industry, competitive,
economic and market conditions, and our related assumptions, as of
such date. We may change our intentions, strategies or plans
without notice at any time and for any reason.
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SOURCE Lumen Technologies