A special-purpose acquisition company, backed by shareholder activist Starboard Value LP, is approaching an agreement to combine it 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 end on Monday assuming the talks don’t collapse, they said.
Existing Cyxtera owners, including private equity firms BC Partners and Medina Capital, plan to turn their stakes into the combined company, people said.
Cyxtera has more than 60 data centers around the world, serving thousands of companies and government agencies. It is one of the largest so-called retail placement 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 schooling needed for Covid-19 gave the sector an extra boost.
SPACs, which have exploded in popularity, raise money in an initial public offering and then look for a business to combine with in an agreement that gives the target an alternative route to public procurement. The starboard vehicle raised $ 360 million when it went public last year. In addition to this, Cyxtera is expected to receive funds raised along with the merger, as is typical in SPAC offerings.