To Increase Asset Ownership with Purchase of
Seven Existing U.S. Data Center Properties
Cyxtera (OTC: CYXTQ) (“the Company”), a global leader in data
center colocation, interconnection services, and digital
infrastructure, today announced that it has entered into an asset
purchase agreement (“APA”) under which Brookfield Infrastructure
Partners L.P. (NYSE: BIP, TSX: BIP.UN) and its institutional
partners (collectively “Brookfield”), will acquire substantially
all of Cyxtera’s assets for $775 million.
In connection with the APA and the court supervised process,
Brookfield will purchase from several landlords the real estate at
which seven of Cyxtera’s U.S. data centers are located. These
transactions will allow Cyxtera to increase existing facility
ownership, secure expansion opportunities in support of robust
customer demand, and strengthen its data center platform by giving
Cyxtera more control over its cost structure.
“We are pleased to reach this agreement with Brookfield, which
represents a favorable path forward for our customers, partners,
and employees,” said Nelson Fonseca, Cyxtera’s Chief Executive
Officer. “Throughout our restructuring process, our business has
continued to perform well, a testament to our customers’ confidence
in our team and our innovative data center platform. This agreement
and the changes to the data center portfolio, most importantly our
increased facility ownership, will enable us to build on our
business momentum and better position Cyxtera for the future.”
Among the transactions made in connection with the APA is a
comprehensive agreement with Digital Realty Trust, Inc. (NYSE: DLR)
and Digital Core REIT (SI: DCRU) for Brookfield to acquire the real
estate supporting several of Cyxtera’s U.S. data centers.
Separately, Cyxtera has entered into an agreement with its
landlord, Digital Realty, to amend the terms of its current leases
at three U.S. sites and three international sites, to allow Cyxtera
to exit those sites in 2024 while providing a seamless transition
for customers.
Lastly, Cyxtera has signed an agreement to sell its business in
its Montreal and Vancouver data centers to Cologix.
Fonseca added, “With Brookfield’s deep global infrastructure
expertise, experienced team, and demonstrated track record, we will
move ahead with a partner that recognizes the strength of our
business and will provide the guidance and resources to drive our
next phase of growth. We remain firmly committed to making this
transition as seamless as possible for all our stakeholders and we
look forward to continuing to serve our customers with the
innovative services and high levels of support they have come to
expect from Cyxtera.”
The full terms of the APA have been filed with the U.S.
Bankruptcy Court for the District of New Jersey. The hearing to
approve the Company’s Chapter 11 plan and transaction with
Brookfield is scheduled for November 16, 2023. In addition to court
approval, the APA is subject to regulatory approval and customary
closing conditions. The transaction with Brookfield is expected to
close in the first quarter of 2024.
Additional Information
Additional information regarding the Company’s court-supervised
process is available at www.CyxteraRestructuring.com. Court filings
and other information related to the proceedings are available on a
separate website administrated by the Company’s claims agent, KCC,
at www.kccllc.net/cyxtera; by calling KCC toll-free at (877)
726-6510, or (424) 236-7250 for calls originating outside of the
U.S. or Canada; or by emailing KCC at cyxterainfo@kccllc.com.
Kirkland & Ellis LLP is serving as legal counsel to Cyxtera,
Guggenheim Securities, LLC is serving as financial advisor, and
AlixPartners, LLP is serving as restructuring advisor. Moelis &
Co. is serving as exclusive financial advisor to Brookfield on the
acquisition of Cyxtera. Wells Fargo and TD Securities are serving
as joint financial advisors to Brookfield on the acquisition of the
real estate underlying seven Cyxtera data centers and the pro forma
combined entity, and are providing committed debt financing for the
broader transaction. Paul, Weiss, Rifkind, Wharton & Garrison
LLP is serving as Brookfield’s legal counsel.
About Cyxtera
Cyxtera is a global leader in colocation, interconnection
services, and digital infrastructure. With IT infrastructure
becoming increasingly hybrid, complex, and distributed, Cyxtera
continues to expand its portfolio beyond space and power to deliver
more cloud-like and flexible infrastructure solutions across its
global data center platform and robust partner ecosystem. Today,
Cyxtera provides more than 2,300 enterprise and government
customers with the technology solutions they need to scale faster,
achieve financial goals, and gain a competitive advantage. For more
information, please visit www.cyxtera.com.
About Brookfield
Brookfield Asset Management (NYSE: BAM, TSX: BAM) is a leading
global alternative asset manager with $850 billion of assets under
management. We invest client capital for the long-term with a focus
on real assets and essential service businesses that form the
backbone of the global economy. We offer a range of alternative
investment products to investors around the world — including
public and private pension plans, endowments and foundations,
sovereign wealth funds, financial institutions, insurance companies
and private wealth investors.
Brookfield Infrastructure
Brookfield operates Brookfield Infrastructure Partners (NYSE:
BIP, TSX: BIP), a leading global infrastructure company that owns
and operates high-quality, long-life assets in the utilities,
transport, midstream and data sectors across North and South
America, Asia Pacific and Europe.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the federal securities laws. Because forward-looking
statements are predictions, projections and other statements about
future events that are based on current expectations and
assumptions, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of Cyxtera’s control. Actual results and
conditions (financial or otherwise) may differ materially from
those indicated in the forward-looking statements. These
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results and conditions to
differ materially from those indicated in the forward-looking
statements, including, but not limited to, the risk that the
transactions contemplated by the APA will not be consummated, or if
they are consummated, that the transactions will not close within
the anticipated time period or that the expected benefits of the
transactions will not be realized when expected or at all; the risk
that one or more conditions to closing under the APA cannot be
satisfied; the occurrence of any event, change or other
circumstances that could give rise to the right of Cyxtera or
Brookfield to terminate the APA; the possibility that the
transactions may be more expensive to complete than anticipated;
risks and uncertainties relating to Cyxtera’s Chapter 11 cases (the
“Chapter 11 Case”), including, but not limited to, Cyxtera’s
ability to obtain Bankruptcy Court approval with respect to motions
or other requests in the Chapter 11 Case, the effects of the
Chapter 11 Case on Cyxtera and on the interests of various
creditors, stockholders and other constituents; Bankruptcy Court
rulings in the Chapter 11 Case and the outcome of the Chapter 11
Case in general; the length of time the Company will operate under
the Chapter 11 Case; risks associated with third-party motions in
the Chapter 11 Case; the potential adverse effects of the Chapter
11 Case on the Company’s liquidity or results of operations and
increased legal and other professional costs necessary to execute
the reorganization; uncertainty associated with evaluating and
completing any strategic or financial alternative as well as
Cyxtera’s ability to implement and realize any anticipated benefits
associated with the alternative pursued; the impact of any
challenge by creditors or other parties to previously completed
transactions; the consequences of the acceleration of the Company’s
debt obligations; and any other statements regarding plans,
objectives, expectations and intentions and other statements that
are not historical facts. The foregoing list of factors is not
exhaustive. You should carefully consider the foregoing factors and
the “Risk Factors” disclosed in Cyxtera’s filings with the SEC from
time to time. There may be additional risks that Cyxtera does not
presently know of or that it currently believes are immaterial that
could also cause actual results to differ from those contained in
the forward-looking statements. In addition, forward-looking
statements reflect Cyxtera’s expectations, plans or forecasts of
future events and views as of the date of this press release.
Accordingly, you should not place undue reliance upon any such
forward-looking statements in this press release. Neither Cyxtera
nor any of its affiliates assume any obligation to update this
press release, except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20231101576475/en/
Media Inquiries Janice Clayton press@cyxtera.com
Aaron Palash / Meaghan Repko / Aura Reinhard / Rose Temple Joele
Frank, Wilkinson Brimmer Katcher (212) 355-4449
Investor Inquiries Kwang Edeker IR@cyxtera.com
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