Specialized data center provider Cyxtera goes public through SPAC merger with Starboard Value.

Cyxtera, a global data center provider, is going public through a SPAC merger with Starboard Value Acquisition Corp (NASDAQ: SVAC). The company will trade under the ticker "CYXT" on the Nasdaq, with the deal expected to close in mid-2021. The transaction values Cyxtera at $3.4 billion and will provide the company with $654 million in gross proceeds. Current Starboard Value Acquisition shareholders will own 11% of the new company.

Cyxtera was formed in 2017 through a carve-out of the data center business from Lumen Technologies (NYSE: LUMN). The company operates as a pure-play in the data storage industry with a substantial global footprint: 61 data centers across 29 markets worldwide and operations in North America, Europe, and Asia with data centers in seven countries. The company serves 2,300 enterprises, service providers, and government customers, including CloudFlare, Fujitsu, Hewlett Packard Enterprises, and Nvidia. Lumen Technologies remains an investor in the company and its largest customer, accounting for 13% of company revenue.

The data center industry is experiencing growth from multiple secular tailwinds. Cyxtera provides both physical and virtual connectivity for its partners and targets yields of 20% from three- to five-year contracts with customers. The company's growth strategy includes geographic expansion, mergers and acquisitions, cross-selling products, and expanding its existing footprint.

Cyxtera demonstrated solid financial performance in fiscal 2020, generating revenue of $690 million and adjusted EBITDA of $213 million. The company is guiding for fiscal 2022 revenue to reach $719 million, with revenue expected to grow approximately 7% annually from fiscal 2021 to fiscal 2025. Shares of Starboard Value Acquisition were up 4% to $11.61 at the time of this report.