A special acquisition company backed by shareholder activist Starboard Value LP is nearing a deal to combine with data center provider Cyxtera Technologies Inc., according to people familiar with the case.
Starboard Value Acquisition Corp. is discussing a deal that would value Cyxtera at about $ 3.4 billion including debt, the people said. It could be finalized Monday, assuming talks don’t fall apart, they said.
Cyxtera’s existing owners, including private equity firms BC Partners and Medina Capital, plan to roll their equity stakes in the combined company, the people said.
Cyxtera has more than 60 data centers around the world and serves thousands of businesses and government agencies. It is one of the largest so-called retail colocation providers, with its data centers serving and connecting multiple customers and supporting the wide adoption of hybrid cloud infrastructure. Demand for data management was already growing thanks to the growth of everything from drones to internet gadgets, as remote work and training required by Covid-19 boosted the industry.
SPACs, which have grown enormously in popularity, raise money through an IPO and then look for a company to combine with in a deal that gives the target an alternative route into the public markets. The starboard vehicle raised $ 360 million when it went public last year. In addition, Cyxtera is expected to receive money raised in addition to the merger, as is common with SPAC deals.