Lumen Technologies and Colt Technology Services (Colt), a digital infrastructure company, announce they have entered into an exclusive arrangement for the proposed sale of Lumen’s Europe, Middle East and Africa (EMEA) business to Colt for $1.8 billion.

This represents a very attractive multiple (~11x) for Lumen’s EMEA business and will create additional value for its shareholders. More information on this transaction can be found in Lumen’s 8-K to be contemporaneously filed with this release.

The envisaged transaction is subject to customary conditions and would involve the divestiture by Lumen of its EMEA business, including its terrestrial and subsea networks, data centers and network equipment in the region to London-headquartered Colt. Upon completion, the transaction will further Lumen’s strategic focus on investing in core businesses that are expected to drive long-term, profitable growth.

Benefits to Lumen:

• Purchase price represents a strong ~11x multiple of the EMEA business’s estimated 2021 adjusted EBITDA.
• Additional capital and a streamlined portfolio will drive more focused investments on enterprise growth and help maintain Lumen’s strong balance sheet.
• The terms of the transaction enable Lumen to continue to serve multinational enterprise customers through its strategic partnership with Colt.

“We are continuing to execute on portfolio optimization at Lumen, creating additional value for our shareholders by monetizing non-strategic assets at accretive multiples,” said Lumen President and CEO Jeff Storey. “This transaction would enhance our focus so we can invest more efficiently in our most strategic opportunities – our key Enterprise and Quantum Fiber initiatives – and partner with regional leaders like Colt in Europe and Cirion in Latin America to continue serving our multinational enterprise customers.”

“This transaction would mark the next chapter in Colt’s exciting story of global growth and world-class innovation,” said Keri Gilder, CEO, Colt Technology Services. “We’re deeply committed to building extraordinary connections for our people, customers and partners across our digital infrastructure. This acquisition would strengthen and extend these connections across existing and new geographies, helping us to accelerate growth and bring the power of the digital universe closer to our customers.”

Known for its commitment to customer experience and its industry-leading environmental, social and governance (ESG) performance, Colt is a global digital infrastructure business with over 60 offices around the world. The transaction will extend Colt’s infrastructure to new geographic markets, boosting the services and capabilities it delivers to global enterprises and strategic partners.

Benefits to Colt:

• Extends Colt’s network into additional countries, European cities and data centers, offering businesses throughout Europe expanded fiber network connectivity.
• Offers Colt access to a full range of product solutions for diversified Enterprise, Hyperscaler, Government and Wholesale customers.
• Positions Colt to meet growing enterprise and international IP traffic in EMEA via extensive terrestrial and subsea reach.
  Strategic partnership

Most of Lumen’s EMEA employees would join Colt after the transaction closes. Colt and Lumen will establish a strategic relationship that will enable Lumen to continue delivering a seamless experience for its multinational customers with needs in EMEA. The partnership will also allow Colt to continue serving the needs of the EMEA-based customers with service needs outside of EMEA.

“Lumen has a strong interest in Colt’s success, and we expect to remain a close business partner and key customer,” said Storey. “Colt’s strong reputation and customer focus make them the ideal partner to serve the needs of our customers, and we expect to remain Colt’s partner of choice for their customers’ needs in North America.”

“Colt and Lumen share values, and a drive to deliver outstanding customer experience,” said Gilder. “This combination is powered by amazing people and incredible infrastructure and is inspired by technology’s ability to change the way we live and work.”

Lumen and Colt envisage the transaction would close as early as late 2023 upon receipt of all regulatory approvals in the U.S. and certain countries where Colt operates, as well as the satisfaction of other customary conditions.

The purchase agreement contains various customary covenants for transactions of this type, including various indemnities and purchase price adjustments.

Morgan Stanley & Co. LLC is acting as financial advisor to Lumen in connection with the transaction, and Bryan Cave Leighton Paisner LLP is serving as legal advisor to Lumen. Evercore Group L.L.C. is acting as financial advisor to Colt in connection with the transaction and Baker & McKenzie LLP is serving as legal advisor to Colt.

About Lumen

Lumen is guided by our belief that humanity is at its best when technology advances the way we live and work. With approximately 400,000 route fiber miles and serving customers in more than 60 countries, we deliver the fastest, most secure platform for applications and data to help businesses, government and communities deliver amazing experiences.

Learn more about the Lumen network, edge cloud, security, communication and collaboration solutions and our purpose to further human progress through technology at news.lumen.com/home

About Colt

Colt Technology Services (Colt) is a global digital infrastructure company which creates extraordinary connections to help businesses succeed. Powered by amazing people and like-minded partners, Colt is driven by its purpose: to put the power of the digital universe in the hands of its customers, wherever, whenever and however they want.

Since 1992, Colt has set itself apart through its deep commitment to its customers, growing from its heritage in the City of London to more than 60 offices around the world. The powerful Colt IQ Network connects 222 cities and 32 countries with more than 1000 data centres, 51 Metropolitan Area Networks and over 31,000 buildings across Europe, Asia and North America’s largest business hubs. Privately owned, Colt is one of the most financially sound companies in the sector.

Obsessed with delivering industry-leading customer experience, Colt is guided by its dedication to customer innovation, by its values and its responsibility to its customers, partners, people and planet.

For more information, please visit www.colt.net