A special-purpose acquisition company backed by activist shareholder Starboard Value LP is approaching an agreement to combine 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 about $ 3.4 billion, including debt, people said. It could be finalized on Monday, as long as the negotiations do not fall apart, they said.
Current owners of Cyxtera, including private equity firms BC Partners and Medina Capital, plan to transfer their holdings to the combined company, people said.
Cyxtera has more than 60 data centers worldwide, serving thousands of companies and government agencies. It is one of the 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, when the remote work and education required by Covid-19 gave the sector an additional boost.
SPACs, which have exploded in popularity, raise money on an initial public offering and then look for a deal to combine into a deal that provides the target with an alternative route to public markets. The Starboard vehicle raised $ 360 million when it went public last year. In addition, Cyxtera is expected to receive funds raised with the merger, as is typical in SPAC business.