Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

AT&T To Sell Data Center Colocation Operations To Brookfield

Published 06/21/2018, 10:15 PM
Updated 07/09/2023, 06:31 AM

In a concerted move to exit the capital-intensive data center business and reduce debt, AT&T Inc. (NYSE:T) has inked an agreement with Brookfield Infrastructure and its institutional partners to divest the properties and related assets. The transaction worth $1.1 billion is likely to be completed by the end of the year subject to mandatory closing conditions and regulatory approvals.

Under the terms of the agreement, AT&T will transfer the ownership of 18 Internet Data Centers in the United States and 13 in international locations to Brookfield. On successful completion of the deal, Brookfield will form a wholly-owned subsidiary to manage the business. AT&T will continue serving the diversified clientele of more than 1,000 companies across technology, financial, industrial, media retail and other sectors as an anchor tenant of the colocation operations.

Over the years, Brookfield has established itself as a leading owner and manager of essential infrastructure assets across the globe. With more than $75 billion in assets under management across the communications infrastructure, utilities, transport, energy, renewable power and sustainable resources sectors, it aims to leverage AT&T’s assets to gain a solid foothold in the colocation data center business.

The strategic alliance is expected to build on AT&T’s nearly two-decade history of providing customers access to premier data centers across the globe and its impeccable success record in the colocation services ecosystem. Moving forward, AT&T and Brookfield will continue working under a joint marketing agreement that will enable both companies to participate in sale/resale opportunities. The proceeds from the transaction are likely to be utilized to reduce AT&T’s debt burden, which apparently surged to $180 billion post the acquisition of Time Warner.

Meanwhile, AT&T is aiming to augment its footing in the digital ad sales market in order to revive its growth trajectory. The company is reportedly holding advanced level talks to acquire AppNexus, a technology firm that operates the world’s largest independent marketplace for digital advertising. AppNexus’ acquisition will likely offer AT&T the requisite wherewithal to better compete against its rival Verizon Communications Inc. (NYSE:VZ) , which already has a significant presence in online advertising, as well as gain a foothold in the market, which is virtually commanded by Facebook, Inc. (NASDAQ:FB) and Alphabet Inc.’s (NASDAQ:GOOGL) Google.

AT&T has underperformed the industry in the past six months with an average loss of 9% compared with a decline of 1.8% for the latter. Whether such collaborations and strategic acquisitions can benefit the stock in the future remain to be seen.


AT&T currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>



Facebook, Inc. (FB): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

AT&T Inc. (T): Free Stock Analysis Report

Verizon Communications Inc. (VZ): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.