Cincinnati Bell plans IPO for data center business
Cincinnati Bell (NYSE: CBB), in an effort to pay down its debt and raise cash to continue growing its CyrusOne data-center business, is planning an initial public offering of shares for the unit, creating a company that will own and operate the business.
Click here for details on Cincinnati Bell's data center colocation revenue.
The company Thursday said it also would look transitioning CyrusOne to a real estate investment trust, if that move will allow it to move forward with the IPO.
The company hasn't determined when, or in what amount, it will attempt the IPO, but said that it plans to file with the U.S. Securities and Exchange Commission soon, possibly in the fourth quarter "should those market conditions be favorable," Cincinnati Bel CEO Jack Cassidy said during the company's earnings call.
Cassidy said the company would "keep a large portion of the ownership of CyrusOne, so Cincinnati Bell will continue to participate and share in the future value generated by this business."
Data center revenue played a big role in the company's earnings in the first quarter, increasing 21 percent, to $53 million, from a year ago. During the quarter, the company added 43,000 sq. ft. of data center space; it said it would add 140,000 square feet more through the end of 2012.
Cincinnati Bell acquired CyrusOne in 2010 for $525 million. It has been run as a separate business since that time.
On the earnings front, the company said revenue for its first quarter was $363 million, up from $361 million a year ago. Net income was $13 million, or 5 cents per diluted share, down from 8 cents a year ago.
"We are off to a good start in 2012 with solid performance from both our teams which continue to execute extremely well," Cassidy said. "We are very encouraged by the revenue and Adjusted EBITDA growth in our data center business and the strong operating results of the communications business."
Pre-market, Cincinnati Bell's shares were up 12.3 percent, to $4. The stock has traded in a range of $2.72 to $4.20 over the past year.