Equinix Acquires Istanbul Data Center from Zenium

REDWOOD CITY, Calif., Oct. 9, 2017 /PRNewswire/ -- Equinix, Inc. (Nasdaq: EQIX), the global interconnection and data center company, today announced that it has acquired the Zenium data center business in Istanbul from the existing shareholders in an all-cash transaction for US$93 million. The data center currently generates approximately US$2.5 million of annualized revenues. The acquisition was signed and completed on October 6, 2017.

The Zenium data center, which will be renamed Equinix IS2, will further strengthen the Equinix position in Europe. As the largest metro in Turkey, Istanbul acts as a strategic gateway between Europe and Asia with critical economic and geopolitical importance. IS2 provides Equinix with key capacity and a growth path which enables the company to address growing demand for colocation and interconnection services in Turkey.

Key Facts

According to the International Monetary Fund, Turkey has the world's 17th-largest nominal GDP¹ and a population of approximately 80 million people. The acquisition of IS2 extends Equinix's ability to provide Turkish businesses with the direct and secure connectivity they need to expand their global reach in new and existing markets. Equinix currently operates a single facility—IS1—in Istanbul, and has 67 International Business Exchange™ (IBX^®) data centers across Europe and the Middle East, strategically located in 18 metropolitan areas across 13 countries.
The purchase of the Zenium business includes a total of three buildings and land. The IS2 data center building is partially fitted out; the two other buildings are shell and core and prepared for data center fit out. IS2 provides Equinix with 1,500 square meters of colocation space today with the ability to increase this to 12,000 square meters and up to 22MW of critical customer load at full build—creating the ability for a future campus environment.
There are 10 networks, including Turk Telecom, already present at the new IS2 data center, providing network choice to the many multinationals, hyperscalers and IT vendors who use Istanbul as a regional headquarters or a gateway to markets in Asia and the Middle East. This connectivity is the foundation for cloud adoption, as enterprises continue to increase IT consumption of cloud-related services to accelerate business performance.
According to the Global Interconnection Index, which measures and forecasts the growth of Interconnection Bandwidth, Europe is expected to grow 44% per annum to reach 1451 Tbps of installed capacity by 2020. Europe's growth will be driven by a number of factors, including data sovereignty and the need for European businesses to exchange information with other businesses in-region.
Istanbul is a key traffic route for submarine cables between Europe, Asia and Africa. These cable systems enable accelerated traffic globalization and data consumption, as well as rapid growth of cloud and online services. They are increasingly important for industries that rely on low-latency connectivity, such as the online gaming and CDNs — many of which already use Istanbul as a regional hub today.
Equinix currently operates more than 180 IBX data centers in 44 markets, providing customers even more ways to connect with other businesses around the world on Platform Equinix™.
Slaughter and May acted as lead external legal advisor for Equinix. RBC Capital Markets served as Zenium's financial advisor.

Quotes

Eric Schwartz, president, EMEA, Equinix:
"The dynamic evolution of digital technology is disrupting how business is done across all industries, forcing companies to invent new, information-centric business models. These business models rely on interconnection and distributed IT architecture. As the Turkish economy continues to grow, Istanbul will become an increasingly important hub for connectivity and technology infrastructure, and this new campus will help Equinix meet this demand from customers across our global customer base."
Franek Sodzawiczny, CEO & founder, Zenium:
"We congratulate Equinix with this transaction, which enables us to focus on our business in Western Europe. The technological infrastructure in Turkey is advancing quickly, as businesses are requiring more interconnection to compete. This is a great opportunity and Equinix is now well positioned to drive this exciting data center business forward."

Additional Resources

Equinix Expansion Continues in 2017 as Interconnection Demand Soars [blog]
Equinix Extends the Digital Edge for Companies with Five New Data Centers and 14 Expansions Opening in 2017 [press release]

About Equinix
Equinix, Inc. (NASDAQ: EQIX) connects the world's leading businesses to their customers, employees and partners inside the most interconnected data centers. In 44 markets across five continents, Equinix is where companies come together to realize new opportunities and accelerate their business, IT and cloud strategies. www.equinix.com.

Forward-Looking Statements
This press release contains forward-looking statements which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual results to differ materially from expectations discussed in such forward-looking statements, including statements related to the acquisition of Zenium and the expected benefits from the acquisition. Factors that might cause such differences include, but are not limited to, unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix, including Zenium; the challenges of acquiring, operating and constructing IBX data centers and developing, deploying and delivering Equinix services; a failure to receive significant revenue from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent Equinix quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.

¹ "Report for Selected Countries and Subjects". IMF World Economic Outlook Database, April 2017. http://www.imf.org/external/pubs/ft/weo/2017/01/weodata/index.aspx

Equinix. (PRNewsFoto/Equinix)