Lumen Technologies has sold its Europe, Middle East and Africa (EMEA) business to Colt Technology Services.

London-headquartered Colt will pay $1.8 billion for the business. The transaction includes Lumen’s terrestrial and subsea networks, datacenters and network equipment in EMEA.

Benefits to Lumen

Lumen said there are numerous benefits to the sale. It said the purchase price represents a strong ~11x multiple of the EMEA business’ estimated 2021 adjusted EBITDA.

Also, its additional capital and a streamlined portfolio “will drive more focused investments on enterprise growth and help maintain Lumen’s strong balance sheet.”

Lumen’s Jeff Storey

Finally, the transaction will enable Lumen to serve multinational enterprise customers through a strategic partnership with Colt.

Lumen president and CEO Jeff Storey said the firm is continuing to execute on “portfolio optimisation.” This creates “additional value for our shareholders by monetising non-strategic assets at accretive multiples.”

He added the sale means it can invest more efficiently in most strategic opportunities like its key Enterprise and Quantum Fiber initiatives. It can also partner with the likes of Colt in Europe and Cirion in Latin America to continue serving our multinational enterprise customers.

‘Next Chapter’ For Colt

Colt has more than 60 offices around the world. The purchase enables it to expand fibre network connectivity throughout Europe.

Most of Lumen’s EMEA employees will join Colt after the transaction closes.

Colt CEO Keri Gilder said the deal marks “the next chapter” for the company.

Colt’s Keri Gilder

“We’re deeply committed to building extraordinary connections for our people, customers and partners across our digital infrastructure,” she said. “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.”

The transaction also offers Colt access to a range of product solutions for enterprise, hyperscaler, government and wholesale customers. Additionally, it positions the firm to meet growing enterprise and international IP traffic in EMEA via extensive terrestrial and subsea reach.

Partner of Choice

The new relationship lets Lumen continue serving its multinational customers with needs in EMEA. The partnership will also allow Colt to serve its EMEA-based customers with service needs outside of the region.

Outgoing CEO Storey said Lumen has “a strong interest in Colt’s success” and expects to remain a close business partner and customer.

“Colt’s strong reputation and customer focus make them the ideal partner to serve the needs of our customers,” he said. “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.

Lumen and Colt envision the transaction closing as early as late 2023 upon regulatory approval in the U.S. and certain countries where Colt operates. It also needs the satisfaction of other customary conditions.