Cincinnati Bell has announced that it intends to pursue an initial public offering of shares of common stock of a company that will be formed to own and operate CyrusOne, Cincinnati Bell's Data Center business. Cincinnati Bell is assessing its ability to conduct the CyrusOne business as a real estate investment trust to determine whether it can pursue the offering under that structure. Cincinnati Bell's objectives from the planned transaction are to execute its growth strategy for the Data Center business, ultimately pay down debt to amounts appropriate for the remaining telecommunications company, and to maximize value for Cincinnati Bell's shareholders. Cincinnati Bell intends to use a portion of the public offering proceeds to repay indebtedness.
Jack Cassidy, Cincinnati Bell’s chief executive officer, was reported as telling analysts, in a conference call that he company intends to “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.” Cassidy said he could not comment specifically on when the company will file IPO registration documents with the U.S. Securities and Exchange Commission or go to market, but that “we believe it will likely be in at least the fourth quarter of this year until we can be in the market, should those market conditions be favorable.”
Cincinnati Bell has also released its financial results for the first quarter of 2012. Amongst the highlights were that for the quarter, data center colocation revenue increased to US$53 million, up 21% from a year ago, while Adjusted EBITDA of $29 million reflects a 20% increase from the first quarter in 2011. The segment added 43,000 s qft of data centre space during the quarter and sold 15,000 sq ft. Total data centre utilization was 85% at the end of the quarter, down slightly from 88% in the fourth quarter of 2011.