Equinix Signs $3.6B Deal to Acquire 24 Data Centers

The acquisition will bring the company’s global footprint to 175 data centers in 43 markets across the Americas, Europe and Asia-Pacific.
Steve Smith, Equinix

Steve Smith, Equinix

Redwood City, Calif., and New York—Verizon Communications, which continues streamlining its operations to focus on its core businesses, has agreed to sell 24 data center sites in the United States and Latin America to Equinix Inc. for $3.6 billion in an all-cash deal.

The 24 sites consist of 29 data center buildings totaling approximately 2.4 million square feet across 15 metro areas and will increase Equinix’s global footprint to 175 data centers in 43 markets and about 17 million square feet across the Americas, Europe and Asia-Pacific. The transaction is expected to close by mid-2017.

“This unique opportunity complements and extends Equinix’s strategy to expand our global platform. It enables us to enhance cloud and network density to continue to attract enterprises, while expanding our presence in the Americas,” Steve Smith, Equinix president & CEO, said in a prepared statement. “The new assets will bring hundreds of new customers to Platform Equinix while establishing a presence in new markets and expanding our footprint in existing key metros. The deal will also provide significant value for shareholders as the proposed transaction is expected to be immediately accretive to our adjusted funds from operations per share upon close.”

New York-based Verizon noted in a separate press release that the transaction is “aligned with its strategy to focus resources in areas that will help drive digital transformation for enterprise customers, while providing world-class service.” The company, the top wireless carrier in the U.S., said the sale would not affect its managed hosting and cloud offerings, or its data center services delivered from 27 sites in Europe, Asia-Pacific and Canada.

In the U.S., the sites to be sold are located in metro areas including Atlanta (Atlanta and Norcross, Ga.); Boston (Billerica, Mass.); Chicago (Westmont, Ill.); Culpeper, Va.; Dallas (Irving, Richardson-Alma and Richardson-Pkwy in Texas); Denver (Englewood, Colo.); Houston; Los Angeles (Torrance, Calif.); Miami (Miami and Doral, Fla.); New York/New Jersey  (Elmsford, N.Y.; Carteret and Piscataway, N.J.); Seattle (Kent, Wash.); Silicon Valley (Santa Clara and San Jose, Calif.); and greater Washington, D.C. (Ashburn, Manassas and Herndon, Va.). In Latin America, sites are located in Bogota and Sao Paulo.

Equinix, based in Redwood City, said the new data centers will provide Network Access Points (NAP) in several locations. The NAP of the Americas facility in Miami is a key interconnection point and will become a strategic hub and gateway to service Latin America. Combined with the Verizon data centers in Bogota and the NAP do Brasil in Sao Paulo, it will strategically position Equinix in the growing Latin American market, the company stated. The NAP of the Capital Region in Culpeper is a highly secure campus focused on government agency customers and will strengthen Equinix’s position among government services and service providers, the firm added.

“This deal is a significant win for our existing customers, who will gain access to new locations, ecosystems and partners. It is also a win for the new companies joining Equinix, as they will be able to leverage Equinix’s global footprint and unique interconnection services,” Karl Strohmeyer, president, Americas, Equinix, said in prepared remarks.

The Verizon portfolio will include about 900 customers, with a significant number of enterprise customers new to Equinix, which is already the world’s biggest provider of data centers. Approximately 250 Verizon employees, primarily in the operations functions of the data centers, will become Equinix employees.

Equinix was advised by Evercore, J.P. Morgan Securities LLC and David Polk & Wardwell LLP.

Citi and Guggenheim Partners acted as financial advisors to Verizon. Jones Day is Verizon’s legal advisor for the transaction.

The Verizon deal comes nearly a year after Equinix completed another blockbuster transaction, acquiring Telecity Group plc, a European peer, for $3.8 billion. Equinix gained more than 40 data centers in Europe through that deal, which had been announced in July 2015.