Windstream to Sell Data Center Business for $575M
LITTLE ROCK, Ark., Oct 19, 2015 (GLOBE NEWSWIRE via COMTEX) —
Windstream WIN, +5.84% a leading provider of advanced network communications, today announced that it has entered into a definitive agreement with TierPoint, a leading national provider of cloud, colocation and managed services, to sell Windstream’s data center business in an all cash transaction for $575 million.
As part of the transaction, Windstream will establish an ongoing reciprocal strategic partnership with TierPoint, allowing both companies to sell their respective products and services to each other’s prospective customers through referrals. This structure will allow Windstream to focus capital on its core telecom offerings while continuing to offer traditional data center services to enterprise customers across a broader data center footprint.
“Data center services will remain an integral component of our enterprise service offering,” said Tony Thomas, president and CEO. “We expect the divested data center business to continue its significant growth under the leadership of TierPoint, and we look forward to partnering closely with them to provide advanced data center services to our enterprise customers.”
“This is a great strategic fit for TierPoint and our customers” - Jerry Kent, Chairman and CEO for TierPoint
“This is a great strategic fit for TierPoint and our customers,” said Jerry Kent, Chairman and CEO for TierPoint. “Windstream Hosted Solutions and its employees have earned a reputation for providing excellent customer service and innovative enterprise-class solutions. We value these team members as a key asset in the acquisition and their expertise adds to our strength and focus on providing a superior level of customer care. We’re also very pleased to enter into a long-term strategic partnership with Windstream, allowing both companies to leverage the expertise and respective strengths of our organizations.”
The boards of both companies have approved the transaction, which is expected to close within the next 2-4 months, subject to customary conditions and approvals.
The data centers being divested generated the following financial results:
- (Dollars in millions) 3 Months Ended June 30, 2015 Second Quarter 2015 Annualized
- Revenue $30.5 $122.0
- Adjusted OIBDA $10.2 $40.8
- Non-GAAP Financial Measures
A reconciliation of this measure to the most directly comparable GAAP measure is presented below:
- (Dollars in Millions) 3 Months Ended Second Quarter
- June 30, 2015 2015 Annualized
- Operating loss under GAAP $(2.0) $(8.0)
- Depreciation and amortization 12.0 48.0
- Stock-based compensation 0.2 0.8
- Adjusted OIBDA $10.2 $40.8
- Additional Information
Windstream, a FORTUNE 500 company, is a leading provider of advanced network communications and technology solutions, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas. For more information, visit the company’s online newsroom at news.windstream.com or follow on Twitter at @WindstreamNews.
TierPoint is a leading national provider of cloud, colocation and managed services designed to help organizations improve business performance and manage risk. With corporate headquarters in St. Louis, MO, TierPoint operates highly-redundant, carrier-neutral data centers in the states of Washington, Texas, Oklahoma, Pennsylvania, Maryland, New York, Massachusetts, Connecticut and Florida.