Black Box selling IT business for $75 million
Cecil Township-based Black Box Corp. announced it is selling its federal government IT services business to a private equity firm for $75 million.
Black Box, a leading global technology solutions provider, did not divulge the name of the buyer in a news release, but said the sale should close by Aug. 31. The company said it will use proceeds from the sale to pay down debt.
The firm had been struggling financially, but announced in July it is getting a major boost from a $10 million contract for a data center being built in Ohio. Black Box said at that time it was working with “the most well-known social media company in the world,” which was building “an almost million square-foot data center.”
The company did not announce the name of that partner or where the center was under construction – other than in Ohio. Black Box said its contract calls for work on digital infrastructure, including 100 miles of fiber-optic cable.
That partner could be Facebook, which is building a $750 million data center in New Albany, Ohio.
Black Box said in July the $10 million contract “promises to be only the tip of the iceberg” in a five- to 10-year relationship with the social media firm. The Cecil company said the partnership could eventually result in the company gaining “$300 million or more,” which would be the largest deal in its 42-year history.
On June 29, Black Box outlined its financial concerns in a filing with the Securities and Exchange Commission. The company said it had about $24 million in cash and $155.7 million in borrowings outstanding, “which raises a substantial doubt about our ability to continue as a concern beyond” December 2018.