Miami has witnessed the closing of a significant chapter in its tech industry history. Manny Medina, hailed as a legendary entrepreneur in the tech realm, has parted with Cyxtera Technologies, a company he founded and nurtured to success.
The sale, culminating after protracted negotiations and under the shadow of a Chapter 11 filing, was to a Canadian investment fund, Brookfield Infrastructure Partners, for a hefty sum of $775 million.
The End of an Era for Cyxtera
The journey of Cyxtera Technologies, under the stewardship of South Florida’s celebrated entrepreneur Manny Medina, has reached a pivotal juncture.
The company has been compelled to divest nearly all its assets amid financial turbulence, leading to protection under Chapter 11.
Insider sources previously hinted to LPO that a total sale was the most pragmatic exit strategy, despite initial resistance from the board, who had scoured for fresh investors to navigate the financial storm.
The Deal Breakdown
The acquisition, set to conclude in the first quarter of 2024, has Brookfield snapping up real estate assets housing seven of Cyxtera’s data centers in the US, as disclosed in a Cyxtera press release regarding the Asset Purchase Agreement (APA) and the court-supervised process.
This transaction is part of a larger negotiation puzzle, with Cyxtera striving to reduce its debt burden and chart a new course for its future.Russian Retailer RusMarket to Open First Store in Cuba
Strategic Transactions Amidst Financial Restructuring
In line with the APA, a comprehensive deal with Digital Realty Trust and Digital Core REIT is set to transfer several real estate properties backing Cyxtera’s data centers in the US to Brookfield.
Additionally, an agreement with Digital Realty to amend current leasing terms at three US locations and three international sites will enable Cyxtera to vacate these premises by 2024 while ensuring a seamless transition for their clientele.
Furthermore, Cyxtera has clinched a deal to offload its data center operations in Montreal and Vancouver to Cologix. These moves, according to Cyxtera, are strategic plays to enhance ownership of existing facilities and support customer-driven expansion demands.
Manny Medina’s Entrepreneurial Journey
Manny Medina’s reputation as a serial entrepreneur is well-deserved, with his flagship achievement being the creation and eventual sale of Terremark to Verizon in 2011, a transaction worth $2 billion.
Post the sale of Terremark, Medina embarked on founding Medina Capital in 2012, a private equity firm with a focus on emerging cybersecurity technologies.
He also became the face of eMerge Americas, a leading tech event that fosters connections across the US, Latin America, and Europe, and significantly contributes to Miami’s status as a tech hub in the Americas.
Cyxtera’s Market Turbulence
The path to the sale was paved with market challenges for Cyxtera. Its stock price plummeted to 31 cents a share from a $3.4 billion valuation at its initial public offering in 2021 through a merger with Starboard Value Acquisition Corp.Cuba approves 148 new companies, of which only one is state-owned
Efforts to raise capital or orchestrate a sale commenced in April as debt interests became unsustainable. By June, with lenders offering an interim lifeline of $50 million, Cyxtera filed for Chapter 11, allowing it to restructure through a pre-packaged bankruptcy.
This sale marks a bitter-sweet milestone for the tech visionary from Matanzas, Cuba, who arrived in Miami at age 13 and carved out an illustrious legacy.
Manny Medina’s entrepreneurial spirit has been a pivotal force in the tech industry, and while the sale of Cyxtera closes one chapter, it also opens up new avenues for growth and innovation in the ever-evolving tech landscape of Miami.