REDWOOD CITY, Calif.,
Feb. 14, 2018 /PRNewswire/ --
Equinix, Inc. (Nasdaq: EQIX), the global interconnection and data
center company, today announced it has entered into a definitive
agreement to acquire the Infomart Dallas, including its operations
and tenants, from ASB Real Estate Investments, in an $800 million debt and cash transaction.
The acquisition of this landmark facility and tenants will
further strengthen the Equinix global platform. The Infomart is one
of the largest interconnection hubs in the U.S. and is currently
home to four of eight Equinix Dallas International Business
Exchange™ (IBX®) data centers (DA1, DA2, DA3 and DA6),
which combined, support approximately 3,500 built out cabinets.
As a result of this transaction, Equinix will increase the
number of its owned assets by four, increasing recurring revenue
from owned assets to more than 45 percent. The acquisition will
also secure the ability to further expand in the Dallas market with future development, and is
expected to expand the important role Equinix plays in helping
companies evolve from traditional businesses to digital businesses
by globally interconnecting with the people, locations, cloud
services and data that are critical to their operations.
The transaction is expected to close by mid-2018, subject to the
satisfaction of customary closing conditions. As part of the deal,
approximately 50 Infomart employees and contractors, primarily in
the operations functions of the acquired facility, will become
Equinix employees or contractors.
Highlights/Key Facts
- The 1.6 million gross-square-foot Infomart includes multiple
diverse fiber entry points, and provides significant expansion
opportunities to Equinix through the existing underdeveloped
capacity (approximately 11MW of power), as well as the potential to
develop additional capacity (approximately 40MW of power) on land
adjacent to the Infomart building. It currently has approximately
45 tenants, including networks, colocation providers, office
tenants and Equinix. Today, Equinix is the largest tenant
accounting for approximately 40 percent of the lease revenues from
the facilities.
- The Infomart building generated approximately $50 million of revenues in 2017, of which
approximately $20 million was
attributed to rent and maintenance recoveries from Equinix. Equinix
expects this transaction to be AFFO per share breakeven one year
from closing. Additionally, there is sizable AFFO upside from
the future development of the acquired land parcel that is adjacent
to the Infomart Dallas building.
- The Dallas metro represents
one of the largest enterprise and colocation markets in the
Americas and the eight Equinix IBX data centers house more than 100
network service providers—more than any other data center provider
in the Dallas metro area.
- The Equinix Dallas IBX data centers offer access to Equinix
Cloud Exchange™ Fabric (ECX Fabric), an on-demand platform that
enables Equinix customers to discover and dynamically connect to
any other customer across any Equinix location globally. Offered
through an easy-to-use portal and a single connection to the
Equinix platform, ECX Fabric offers access to more than 1,000 of
the world's largest enterprises, cloud service providers (including
Alibaba Cloud, Amazon Web Services,
Google Cloud Platform, IBM Cloud, Microsoft Azure and Oracle Cloud)
and SaaS providers (including Salesforce, SAP and ServiceNow, among
others). By reaching their entire digital ecosystem through a
single private and secure connection, companies can rapidly scale
their digital business operations globally. Customers can also
locate their data close to the edge of their network, increasing
performance by keeping data near consumption points.
- The financial terms of the deal include cash consideration of
$31 million combined with
$750 million in senior unsecured
notes issued to ASB at various maturities over 36 months after the
closing date. The notes will be valued at approximately
$769 million when adjusted to reflect
the current trading value of Equinix currently outstanding
bonds.
- ASB Real Estate Investments owns Infomart Data Centers on
behalf of its Allegiance Real Estate Fund, a $7.4 billion core vehicle, which invests
nationally in institutional-quality real estate. Equinix was
advised on the transaction by Citi, J.P. Morgan and Davis Polk
& Wardwell LLP.
Quotes
Karl Strohmeyer, President,
Americas, Equinix:
"As Dallas becomes an increasingly
strategic North American interconnection hub for businesses making
the shift to digital, the acquisition of the Infomart will enable
existing and new customers to scale their operations with Equinix.
This includes a rich portfolio of interconnection options,
including on-demand connections to partners and infrastructure in
any Equinix location globally through the new capabilities of
Equinix Cloud Exchange Fabric."
Additional Resources
- Maverick Research -- The Edge Will Eat the Cloud [Gartner
Report]
- Colocation-Based Interconnection Will Serve as the 'Glue' for
Advanced Digital Business Applications [Gartner Report]
- The Platform Equinix Vision -- Build Here, and Go Anywhere
[Equinix Paper]
- Equinix IBX Data Center Virtual Tour
- Equinix Expansion Overview
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 48 markets
worldwide, 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 the Dallas Infomart from ASB, the expected benefits
from the acquisition and the expected timing for closing the
acquisition. When used in this document, the words
"anticipates," "can," "will," "look forward to," "expected" and
similar expressions, and any other statements that are not
historical facts, are intended to identify those assertions as
forward-looking statements. Factors that might cause such
differences include, but are not limited to, the failure of one or
more conditions to the acquisition of the Dallas Infomart from ASB
to be satisfied; the occurrence of any event, change or other
circumstance that would compromise our ability to complete the
acquisition of the Dallas Infomart from ASB within the expected
timeframe or at all; the possibility that the anticipated
benefits from the proposed acquisition cannot be fully realized or
may take longer to realize than expected; unanticipated costs
or difficulties relating to the integration of data centers or
companies we have acquired or will acquire into Equinix, including
the Dallas Infomart; the challenges of acquiring, operating
and constructing IBX data centers and developing, deploying and
delivering Equinix services, including in the Dallas Infomart; a
failure to receive significant revenue from customers in recently
built out or acquired data centers, including those in the Dallas
Infomart; 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. Accordingly, no assurances can
be given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
impact they will have on Equinix. 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.
Equinix, IBX and Platform Equinix are registered trademarks of
Equinix, Inc. Equinix Cloud Exchange, Equinix Cloud Exchange
Fabric, and International Business Exchange and Platform Equinix
are trademarks of Equinix, Inc.
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SOURCE Equinix, Inc.