It currently trades at an EV/EBITDA multiple of approximately 15x, while its peers trade at much higher levels - Equinix at 29.62x, Digital Realty at 30.89x, CyrusOne at 23.77x and Switch at 29.98x. This should help the company close the large valuation gap it has with its peers.
Lastly, having better and quicker access to capital will allow the company to grow quicker, whether inorganically or through M&A. Second, as a public, more transparent company, it has much more credibility in attracting large clients who can now do their due diligence quicker before signing long-term contracts and have the confidence that they are dealing with a public, government regulated entity.
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First, it has a professional board (including Jeff Smith of Starboard) with diverse experience to oversee management. The SPAC structure offers the company many advantages to allow it to grow at a quicker rate. Medina and Fonseca have been doing just that for the past 3.5 years but now are ready to take it to the next level through the merger with the Starboard SPAC. So, when CenturyLink was selling Cyxtera, Medina and Fonseca recognized an opportunity to run the Cyxtera data centers in a more focused manner and with the ability to offer connectivity and other services to its clients through multiple carriers (not just CenturyLink) in addition to other value-added solutions for their clients like data center as a service or AI as a service solution. Terremark Worldwide was eventually acquired by Verizon and the two saw firsthand how larger connectivity companies like Verizon and CenturyLink are good at selling network access but do not focus as much on optimizing the data centers. Medina built Terremark Worldwide, with Fonseca as his second. Manny Medina and Nelson Fonseca, both of Medina Capital, had previous experience in this space together. This completely aligns Starboard's interest with its investors and more closely aligns it with the other shareholders of the company who are in closer to the $10 per share SPAC price.Ĭyxtera was previously owned by CenturyLink (now called Lumen Technologies) before it was sold to Medina Capital and BC Partners who partnered together to acquire the assets. As a result, Starboard investors are in this investment for an aggregate average cost of $6.54 per share, instead of $9.68 per share that the Starboard investors paid for their shares and the $1.07 per share the Founders paid for their shares. All of the economics (including the sponsor shares and warrants) go to the Starboard clients and Starboard makes its hedge fund promote on any profits just like any other Starboard portfolio investment. While the filing implies that the Starboard Sponsor owns the low-priced stock and the Starboard clients own the high-priced shares, this is not the case, and Starboard actually created a structure that is very friendly to the Starboard clients. Stock Market Value: $1.5B ($9.42 per share) Activist: Starboard Value In addition, it offers threat analytics, safe browsing, and detect monitoring services. The company also provides AppGate SDP, a network security platform to secure any application and AppGate Insight, which provides cloud and network architects visibility into all of the network traffic. It offers Cyxtera Portal, enabling customers to monitor, manage, and control their digital infrastructure from a single, dedicated platform colocation services data center services Cyxtera Extensible Data Center platform, a platform that transforms IT infrastructure design, configuration, and deployment. It provides data center, colocation, enterprise application cloud computing, hybrid cloud, cyber security, and analytics solutions to government, enterprises, and service providers. The company operates a footprint of more than 60 data centers around the world, providing services to more than 2,300 leading enterprises and U.S.
Business: Cyxtera is a global leader in the data center colocation and interconnection services.
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