Starboard Value Acquisition Corp (NASDAQ: SVAC), a special purpose acquisition company (SPAC), today released its Preliminary Proxy Statement (PREM14A) related to its $3.4bn business combination with retail colocation provider Cyxtera Technologies. Indeed, the merger will close in mid-2021 and Cyxtera will trade on the Nasdaq under the symbol CYXT. Below we summarize notable events and key takeaways regarding the background of the Starboard and Cyxtera merger.

Initial Public Offering (IPO) – Starboard Value Acquisition

In September 2020, Starboard Value Acquisition completed its initial public offering (IPO) of 36 million units at $10.00 per unit, generating gross proceeds of $360m. Subsequently, the underwriters of the IPO partially exercised their over-allotment option, purchasing an additional 4.4 million units, generating gross proceeds of $44.2m. Finally, Starboard Value Acquisition completed private sales of warrants.

Overall, the IPO, over-allotment units, and sale of warrants raised $404m ($10.00 per unit) of net proceeds for Starboard Value Acquisition. In turn, the Starboard SPAC gained the wherewithal, from this equity capital raise, to fund its acquisition of Cyxtera Technologies.

Search for Businesses to Acquire

Following the Starboard Value Acquisition IPO, the company commenced an active search for prospective businesses or assets to acquire for its initial business combination.

Overall, Starboard Value Acquisition evaluated over 300 businesses to combine with. Specifically, these companies were in various industries, including financial technology, gaming, social networking, enterprise software, consumer internet or products, artificial intelligence, and healthcare. Of this total, Starboard entered into non-disclosure agreements (NDAs) with 11 of the potential business combination targets.

Through this process, Starboard identified retail colocation provider Cyxtera Technologies as its ultimate acquisition target.

Business Combination – Starboard Value Acquisition Acquires Cyxtera Technologies

Developments in 2020 – Starboard Value Acquisition and Cyxtera Technologies

  • October 19, 2020: Starboard Value Acquisition receives an introductory e-mail from Citi, an investment bank, describing a transaction for Cyxtera
  • October 29, 2020: representatives of Starboard participate in a management presentation with representatives of Cyxtera. The following day, Starboard receives access to a virtual data room containing due diligence materials, including financial information
  • November 18, 2020: Starboard Value Acquisition submits a preliminary non-binding proposal
  • December 14, 2020: Starboard Value Acquisition submits a second-round proposal, including an initial draft of a letter of intent (LOI)

Developments in 2021 – Starboard Value Acquisition and Cyxtera Technologies

  • Early January 2021: members of Starboard visit several of Cyxtera’s data center locations in Northern California, Atlanta, and Tampa
  • January 4, 2021: Starboard Value Acquisition and Cyxtera execute the letter of intent (LOI), which contains exclusivity provisions
  • Late January 2021: a virtual data room containing due diligence information regarding Starboard Value Acquisition and Cyxtera is opened to third-party investors. Specifically, this relates to a Private Investment in Public Equity (PIPE) capital raise
  • February 2, 2021: Latham & Watkins, Cyxtera’s legal counsel, delivers an initial draft of the merger agreement to Akin Gump, Starboard Value Acquisition’s legal counsel
  • February 21, 2021: Cyxtera, Starboard Value Acquisition, and their respective legal counsel finalize and enter into the merger agreement. Additionally, Starboard Value Acquisition enters into subscription agreements for the PIPE capital raise with institutional investors
  • February 22, 2021: Starboard Value Acquisition and Cyxtera issue a press release announcing the business combination, pre-market opening

Overall, the PIPE capital raise secured $250m of gross proceeds for Starboard Value Acquisition. Specifically, Limited Partners (LPs) of Starboard committed $60m of the $250m PIPE funding and Fidelity Management made a separate commitment.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.


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