Continuing to streamline its portfolio, Lumen Technologies (NYSE: LUMN) will sell its Europe, Middle East, and Africa (EMEA) business to Colt Technology Services, the two companies say. The $1.8 billion Colt has agreed to pay for the assets represents a multiple of approximately 11X of the business unit’s estimated 2021 adjusted EBITDA. The deal is subject to customary conditions and could close as soon as late 2023, the companies estimate.
As part of the sales agreement, the two companies will enter a partnership that will see Lumen continuing to serve EMEA connectivity requirements via Colt’s newly expanded network. Meanwhile, Colt will leverage Lumen’s network to serving the needs of the EMEA-based customers for service outside of EMEA.
The sale includes Lumen’s terrestrial and submarine network assets in EMEA. The company says the deal will provide additional capital and streamline its portfolio maintain a strong balance sheet while enabling more focused investments on enterprise growth. Colt will gain additional network assets and strengthen its service portfolio to better address the needs of enterprise, hyperscale, government, and wholesale customers.
The pending sale follows Lumen's divestiture of ILEC assets in 20 states -- a transaction that formed Brightspeed -- and the offloading of Latin American assets to Stonepeak (see “Lumen, Brightspeed close ILEC transfer deal” and “Lumen closes Latin American business sale to Stonepeak to create Cirion”).
"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 (who will retire November 7). "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 of 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."
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