Lumen agrees sale of EMEA business to Colt

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Lumen Technologies has entered into an exclusive agreement with digital infrastructure firm, Colt Technology Services for the proposed sale of the former’s Europe, Middle East and Africa (EMEA) business to the latter for $1.8bn. 

Lumen says that the purchase price represents a strong ~11x multiple of the EMEA business's estimated 2021 adjusted EBITDA. The additional capital and a more streamlined portfolio will help to drive more focused investments on enterprise growth and help maintain Lumen's balance sheet. The terms of the transaction also enable Lumen to continue to serve multinational enterprise customers through its strategic partnership with Colt.

The transaction will extend Colt's infrastructure to new geographic markets, boosting the services and capabilities it delivers to global enterprises and strategic partners. It also offers Colt access to a full range of product solutions for diversified enterprise, hyperscaler, government and wholesale customers. The move positions Colt to meet growing enterprise and international IP traffic in EMEA via extensive terrestrial and subsea reach.

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.

Jeff Storey, CEO at Lumen says: "We are continuing to execute on portfolio optimisation at Lumen, creating additional value for our shareholders by monetizing non-strategic assets at accretive multiples. This transaction would enhance our focus so we can invest more efficiently in our most strategic opportunities – our key enterprise and quantum fibre initiatives – and partner with regional leaders like Colt in Europe and Cirion in Latin America to continue serving our multinational enterprise customers. 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."

Keri Gilder, CEOat Colt Technology Services adds: "This transaction would mark the next chapter in Colt's exciting story of global growth and world-class innovation. 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."

Lumen and Colt envisage the transaction would close as early as late 2023 upon receipt of all regulatory approvals in the USA and certain countries where Colt operates, as well as the satisfaction of other customary conditions.

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