Little Rock-based Windstream announced today, Oct. 19, that it has entered into a definitive agreement with TierPoint, a leading national provider of cloud, colocation and managed services, to sell its 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 allows 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, Windstream 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,” 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 two to four 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|