A special-purpose procurement company backed by shareholder activist Starboard Value LP is reaching a deal to merge with data center provider Cyxtera Technologies Inc., according to people familiar with the matter.
Starboard Value Acquisition Corp. is discussing a deal that would value Cyxtera at around $ 3.4 billion, including debt, the people said. It could end on Monday assuming the talks don’t fall apart, they said.
Cyxtera’s current owners, including private equity firms BC Partners and Medina Capital, plan to transfer their equity stakes to the combined company, the people said.
Cyxtera has more than 60 data centers around the world, serving thousands of businesses and government agencies. It is one of the alleged largest retail colocation providers, with its data centers serving and connecting multiple customers and supporting the widespread adoption of hybrid cloud infrastructure. The demand for data management was already increasing thanks to the growth of everything from drones to internet-enabled devices, as the remote work and schooling required for Covid-19 gave the sector an additional boost.
SPACs, which have exploded in popularity, raise money in an initial public offering and then look for a business to combine with in a deal that gives the target an alternative route to public markets. The Starboard vehicle raised $ 360 million when it went public last year. On top of that, Cyxtera is expected to receive funds raised in conjunction with the merger, as is typical in SPAC deals.