Equinix, Inc. has reached an agreement to divest eight assets in its European business to Digital Realty Trust, Inc. for the amount of $874.4m (€771.8m). As a condition of obtaining clearance from the European Commission in November 2015 for Equinix's acquisition of TelecityGroup plc, Equinix selected and agreed to divest the following facilities: TelecityGroup's Bonnington House, Sovereign House, Meridian Gate and Oliver's Yard data centres and Equinix's West Drayton data centre in London; TelecityGroup's Science Park and Amstel Business Park I in Amsterdam; and TelecityGroup's Lyonerstrasse data centre in Frankfurt.
The agreement is subject to certain customary closing conditions, including approval by the European Commission, as well as completion of the works council consultation process in the Netherlands. Upon approval by the European Commission, and satisfaction of the other conditions, the transaction is expected to close in Q3 2016.
Additionally, Equinix has separately negotiated with Digital Realty a binding option for Equinix to acquire Digital Realty's operating business including its real estate and facility in St. Denis, Paris where Equinix has an established presence with its PA2 and PA3 International Business Exchange™ (IBX®) data centres. The acquisition is subject to certain conditions, including confirmatory due diligence by Equinix, any mandatory governmental or local authority approvals, and any required employee consultation processes. The acquisition is expected to complete in H2 2016.
Key Facts
- On January 15, 2016, Equinix completed the acquisition of TelecityGroup plc in a transaction valued at approximately $3.8bn (€3.35bn). The addition of TelecityGroup's 34+ data centres, net of the divestment, more than doubles Equinix's capacity in Europe, fortifying its position as the largest retail colocation provider in the region and in the world.
- The acquisition of TelecityGroup adds critical network and cloud density to better serve enterprise customers who see interconnection as a core IT design principle and are increasingly moving to highly interconnected, global data centres for accelerated business performance and innovation.
- In addition, Equinix has added seven new markets in Europe to its portfolio, providing customers even more ways to connect with other businesses around the world on Platform Equinix™. Resulting from the market additions, Equinix now operates 145 data centre facilities, net of the divestment, in 40 markets, including the additions of Dublin, Helsinki, Istanbul, Manchester, Sofia, Stockholm, and Warsaw.
- The option agreement for Equinix to acquire the operating business and facility in St. Denis, Paris where Equinix has an established presence and a strong customer base furthers its commitment to the Parisand European markets and its corporate strategy of owning the underlying real estate on which Equinix operates its large data centre campuses.
Steve Smith, president and CEO, Equinix, said: "We are pleased to reach this divestiture milestone to satisfy the European Commission requirements, as agreed to with our purchase of TelecityGroup. Additionally, our proposed purchase of the Paris land and business assets from Digital Realty is a key step in our strategy to invest behind our customers and ecosystems in locations where we have sizable campuses – this includes Paris. Both of these deals today enable us to focus on increased growth of the Equinix portfolio. With increased interconnection in Europe, Equinix continues to build on its global market leadership, creating new opportunities to grow business ecosystems around the world."
