Cyxtera Technologies: Six letters of intent to acquire the business delivered to Cyxtera

Jun 19, 2023 | Posted by Abdul-Rahman Oladimeji

Data center company Cyxtera is being seriously considered for acquisition by at least six parties. This month, struggling Cyxtera filed for Chapter 11 bankruptcy due to continuous losses and impending debt maturities. The organization is seeking a buyer or new investor. The company has contacted scores of potential companies regarding a possible investment or sale.

It is not known which businesses have submitted letters of intent. According to the company's bankruptcy schedule, final proposals must be submitted by July 19, and the court must confirm the final results by September 22. In 2021, Cyxtera went public via a SPAC. In a $3.1 billion transaction, the company merged with the Nasdaq-listed Starboard Value Acquisition Corp. (SVAC). The business allegedly considered going private again within a year, but no company has emerged to take it over. As debt matured earlier this year, rumors began to circulate that the company was once again seeking a buyer.

The colo company runs more than 60 facilities with a combined capacity of more than 245MW in 29 markets worldwide; the vast majority of its portfolio is leased. According to bankruptcy filings, Cyxtera faced "significant headwinds" from inflation and volatility in the macroeconomics, which drove up interest rates and energy costs. Cyxtera's annualized interest costs on funded debt increased from $35.9 million in Q1 2022 to $75.7 million in Q1 2023 due to increased interest rates. The company has debt maturing in April and May 2024, totaling just over $1 billion.