Cloud Services

AT&T Closes $1.1B Sale of Data Center Colocation Unit to Brookfield

DALLAS -- AT&T Inc. announced today that it has completed the sale of its data center colocation operations and assets to Brookfield Infrastructure and its institutional partners (“Brookfield”). The company previously announced a strategic alliance with Brookfield that included the transfer of these operations and assets.

Brookfield has established a wholly owned company, Evoque Data Center Solutions™ (“Evoque”), to own and operate the assets. Customer contracts, employees supporting the colocation operations, fixed assets, leases and specified owned facilities have been transferred to Brookfield.

Evoque joins AT&T’s global colocation ecosystem program where AT&T will offer Evoque’s colocation services to business customers. The ecosystem program offers business customers access to 350+ data centers around the world.

Under the terms of the deal, AT&T has received $1.1 billion, which will support the company’s goal of reducing its net-debt-to-EBITDA-ratio to the 2.5x range by the end of 2019.

On June 21, 2018, AT&T announced a new strategic alliance with Brookfield Infrastructure and its institutional partners (“Brookfield”) pursuant to which AT&T will transfer data center colocation operations and assets to Brookfield. Under Brookfield’s ownership, the business will continue to deliver colocation services to customers in 18 Internet Data Centers (IDCs) in the United States and 13 outside the United States. The colocation data center operations serve a diversified customer base of more than 1,000 companies across the technology, financial, industrial, media retail and other sectors worldwide.

AT&T and Brookfield are committed to delivering the same high level of service their customers expect. After the close of the transaction, AT&T will continue to deliver network services to its customers at the IDCs. AT&T will become an active sales channel for the business and will be the anchor tenant of the colocation operations. AT&T will continue to offer customers access to colocation services at more than 350 data centers — including transferred IDCs — around the world as part of AT&T’s colocation ecosystem program.

Brookfield brings a long track record of owning and managing essential infrastructure assets and global scale and expertise to enhance and grow the business. Brookfield is one of the world’s largest investors, owners and operators of infrastructure assets globally, with more than $75 billion in assets under management across the communications infrastructure, utilities, transport, energy, renewable power, and sustainable resources sectors.

Brookfield is establishing a wholly-owned company to own and operate the assets and intends to appoint Tim Caulfield as CEO of the business. Mr. Caulfield is currently CEO of ANTARA Group, an IT management consultancy focused on the Internet-as-a-Service segment with extensive experience in data center services. Mr. Caulfield’s leadership team includes veterans of AT&T and other leading communications and technology companies.

This agreement builds on AT&T’s nearly 20-year history of providing customers access to premier data centers. The strategic alliance with Brookfield will build on the success of the ecosystem model, allowing AT&T to continue to offer colocation services through Brookfield. Over the past several years, AT&T has added additional data center providers to this ecosystem. AT&T and Brookfield will also work under a joint marketing agreement that will enable both companies to participate in sale/resale opportunities to bring customers a full suite of services.

AT&T remains committed to delivering best-in-class services to businesses around the globe and will continue to provide the same access to premium data centers and networking services, including security, cloud networking and mobility, that it provides today.

These include:

Data Center Connectivity – Industry leading connectivity services including Ethernet, Internet and VPN.

AT&T NetBond for Cloud – A scalable, predictable and highly secure connection to the cloud.

AT&T FlexWareSM – Simplifies delivering and deploying software-based functions like routers and firewalls using Software-Defined Networking (SDN) and Network Function Virtualization (NFV) technologies. It streamlines network infrastructure and has the potential to lower businesses’ capital investments.

Cloud and Data Center Consulting – AT&T offers businesses highly skilled experts who provide consultation and design around data center, cloud and network migrations.

Financial and Closing

Under terms of the agreement, AT&T will receive $1.1 billion, which it will use to pay down debt. At close, customer contracts, employees supporting the colocation operations, fixed assets, leased and owned facilities will transfer to Brookfield.

AT&T Inc. (NYSE: T)

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