Altice moves ahead with data centre sale to Morgan Stanley Infrastructure Partners

Source: Altice

Altice France, the Patrick Drahi-owned telecom operator and media outfit struggling under a mountain of debt, has struck a deal  with Morgan Stanley Infrastructure Partners for the sale of its data centre business in France.

Altice France and Morgan Stanley Infrastructure Partners will create what the pair describe as the first nationwide independent distributed colocation provider in France through the sale of a 70%-majority stake in UltraEdge, a new data centre company to be formed comprising 257 data centers plus office space currently operated by Alice-owned SFR.

The planned transaction gives UltraEdge an enterprise value of €764 million. SFR will enter into a ‘build-to-suit’ agreement with UltraEdge through which SFR is expected to generate an additional €175 million over the next seven years.

UltraEdge will have more than 45MW of installed capacity and about 33,000 sq. metres of owned office space distributed across the country including in key metropolitan areas. The unit enables data storage and connectivity services from these sites which are connected on SFR’s nationwide fibre infrastructure. Under the terms of the deal, passive infrastructure and equipment of the datacentres will be transferred to UltraEdge with servers and active equipment retained at SFR.

Closing of the transaction, which will be subject to regulatory approvals, is expected to occur in the first half of 2024.

Drahi has been looking at options to offload multiple assets as concern mounts over Altice France and Altice International’s ability to service their huge debts, particularly in the wake of the corruption scandal centred on the company’s Portuguese operations, which has shaken investor confidence.

Options said to be under consideration in recent weeks include the partial sale of SFR itself and the sale of the Portuguese operation.

The sale of the data centre business has however been seen as the most obvious place to start, with Altice France reportedly hiring an investment bank as early as last year to look into options to sell the business.