REDWOOD CITY, Calif.,
April 21, 2020 /PRNewswire/
-- Equinix, Inc. (Nasdaq: EQIX), the global
interconnection and data center company, today announced the
signing of a greater than US$1.0
billion initial joint venture in the form of a limited
liability partnership with GIC, Singapore's sovereign wealth fund, to develop
and operate xScaleTM data centers in Japan.
The three initial facilities in the joint venture – one in
Osaka and two in Tokyo -- will serve the unique core workload
deployment needs of a targeted group of hyperscale companies,
including the world's largest cloud service providers. With these
xScale data centers, hyperscale companies can add core deployments
to their existing access point footprints at Equinix, enabling
their growth on a single platform that can immediately span 55
global metros and offer direct interconnection—within a vibrant set
of ecosystems—to their customers and strategic business
partners.
Rapid growth of the digital economy has driven increasing demand
for global connectivity and hybrid multicloud solutions. For years,
the world's largest cloud service providers, including Alibaba Cloud, Amazon Web Services, Google
Cloud, IBM Cloud, Microsoft Azure and Oracle Cloud Infrastructure,
have partnered with Equinix to leverage its global platform of 210
data centers to directly connect to their strategic business
partners and customers. As these companies continue to expand in
Asia-Pacific, they require
capacity at scale to match their internal compute, storage and edge
cache requirements.
Highlights/Key Facts:
- The initial three facilities included in the joint venture will
provide approximately 138 megawatts (MW) of power capacity to the
Osaka and Tokyo markets when fully built-out.
- xScale data centers provide hyperscale companies with a
differentiated value proposition from existing wholesale data
center operators in two key areas:
-
- xScale data centers offer access to Equinix's comprehensive
suite of interconnection and edge services. These services will tie
into the hyperscale companies' existing access points at Equinix,
thereby increasing the speed of connectivity to their existing and
future enterprise customers.
- xScale data centers are engineered to meet the technical and
operational requirements and price points of core hyperscale
workload deployments. This enables hyperscale companies to
consolidate core and access point deployments into one global
provider to streamline and simplify their rapid growth.
- Platform Equinix® offers the most access points—the
"on- and off-ramps to the cloud"—to the top global cloud service
providers. As hyperscale companies scale their operations at
Equinix, the ecosystem of nearly 10,000 enterprises and other
companies currently operating at Equinix benefit from increased
opportunities to directly connect and operate in proximity to the
largest global cloud operators.
- Japan is the third-largest
economy in the world[1] and a significant hub for regional
interconnection. As one of the world's largest metro areas and a
fulcrum of the Japanese economy, Tokyo is home to a large concentration of
global and regional corporate headquarters which form a critical
mass of end-user customers with high demand for hyperscale
services. Osaka is centrally
located, contains the second-highest concentration of businesses in
Japan, and is a center for
start-up companies and innovation.[2] Both metros currently have
constrained supply, yet are priorities for hyperscale growth,
according to Structure Research[3].
- Equinix is a top data center provider in Japan with 13 International Business Exchange™
(IBX®) data centers and more than 500 employees.
- In 2019, Equinix and GIC announced the formation of a joint
venture to develop and operate xScale data centers in Europe.
- Private connectivity between enterprises, strategic cloud
service providers and network services is growing as a strategy of
choice for businesses, as digital transformation fuels higher
demand for localized digital services at the edge. According to the
Global Interconnection Index, Volume 3, a market study published by
Equinix, interconnection bandwidth growth in Asia-Pacific is forecast to reach 3,825+ Tbps
by 2022, which is 28% larger than Europe. The Cloud & IT Services segment in
Asia-Pacific is forecast to grow
at a 50% CAGR, outpacing all other regions globally, reaching a
total bandwidth that is 49% larger than North America and 119% larger than EMEA by
2022.
Financial Details:
- Under the terms of the agreement, GIC will own an 80% equity
interest in the joint venture and Equinix will own the remaining
20% equity interest. The joint venture is expected to close in 2H
2020, pending regulatory approval and other closing
conditions.
- Upon closing of this joint venture, GIC is expected to have
contributed cash to fund its 80% equity interest in the joint
venture. Equinix is expected to have transferred its Tokyo TY12 and Osaka OS2 development assets, along with
development rights and the land for an additional data center in
Tokyo, to the joint venture in
return for a 20% equity interest in the joint venture and net cash
proceeds in excess of US$100
million.
- Financing for the joint venture is also expected to close in 2H
2020 and is anticipated to consist of a delayed draw term loan
facility and a revolving credit facility. Proceeds from the delayed
draw term loan facility are expected to fund a portion of the
consideration paid to Equinix for the sale to the joint venture of
TY12 and OS2 development assets, as well as to fund a portion of
the planned development and construction costs for those assets.
The revolving credit facility is expected to be available for
working capital needs and other general corporate purposes of the
joint venture.
- Citi served as exclusive financial advisor to Equinix in
connection with this transaction.
Quotes:
- Jabez Tan, Head of Research,
Structure Research:
"Japan is a strategic country for regional
hyperscale expansion, and the demand for data center capacity in
the Tokyo and Osaka markets has outstripped supply. Through
this new joint venture, Equinix and GIC will be a top provider of
new data center capacity for the world's largest hyperscale
companies seeking to expand in these two strategic markets –
leveraging Equinix for both their core workload and interconnection
requirements. This expansion aims to accelerate the adoption
of hybrid and multicloud architectures by companies throughout the
region."
- Charles Meyers, President and
CEO, Equinix:
"Hybrid and multicloud have emerged as the
clear IT architecture of choice, and Equinix is continuing its
efforts to satisfy both the interconnection and core workload needs
of the top hyperscale and cloud companies powering this
infrastructure. Following our successful partnership with GIC on
the initial xScale data center joint venture in Europe announced last year, we are now
continuing our partnership with the formation of a new joint
venture in Japan. The new
facilities under this JV will allow our hyperscale customers to
streamline their continued growth, while strengthening Equinix's
leadership position in the cloud ecosystem."
Additional Resources
- Equinix and GIC to Form Hyperscale Joint Venture in
Asia-Pacific [blog]
- Learn more about Platform Equinix [website]
- Global Interconnection Index Volume 3 [market study]
- Equinix and GIC Partner to Develop Hyperscale Data Centers in
Europe [Structure Research
report]
About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects the world's leading
businesses to their customers, employees and partners inside the
most-interconnected data centers. On this global platform for
digital business, companies come together across more than 50
markets on five continents to reach everywhere, interconnect
everyone and integrate everything they need to create their digital
futures. www.equinix.com.
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties. Actual results may differ
materially from expectations discussed in such forward-looking
statements. Factors that might cause such differences include, but
are not limited to, risks related to Equinix's ability to
complete the closing of the Joint Venture on the proposed terms and
schedule; risks related to Equinix or GIC being able to satisfy
their respective closing conditions related to the Joint Venture,
including obtaining regulatory approval; any inability of Equinix,
GIC or the Joint Venture to obtain financing as needed; risks
related to whether the data centers which will be contributed to
the Joint Venture will be integrated successfully, and whether such
integration may be more difficult, time-consuming or costly than
expected; risks that the expected benefits of the Joint Venture
will not occur; the challenges of operating and managing data
centers and developing, deploying and delivering Equinix services;
the ability to generate sufficient cash flow or otherwise obtain
funds to repay new or outstanding indebtedness; competition from
existing and new competitors; the loss or decline in
business from key hyperscale companies; disruption from the
Joint Venture making it more difficult to conduct business as usual
or maintain relationships with customers, employees or suppliers;
and other risks described from time to time in Equinix's 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] Nasdaq: "The 5 Largest Economies In The
World And Their Growth In 2020"
https://www.nasdaq.com/articles/the-5-largest-economies-in-the-world-and-their-growth-in-2020-2020-01-22
[2] RocketSpace:
https://www.rocketspace.com/corporate-innovation/japans-3-hottest-cities-for-startups-and-innovation
[3] Structure Research: Japan DCI Report 2020: Data
Centre Colocation, Hyperscale Cloud & Interconnection
View original content to download
multimedia:http://www.prnewswire.com/news-releases/equinix-and-gic-to-form-greater-than-us1-0-billion-joint-venture-to-develop-and-operate-hyperscale-data-centers-in-japan-301044052.html
SOURCE Equinix, Inc.