Equinix targets Japanese expansion via Bit-isle acquisition

Interconnect and data center services company Equinix, Inc. (NASDAQ: EQIX) says it intends to buy Tokyo-based Bit-isle Inc. (TSE: 3811) for approximately $280 million in cash. The offer is being made through Equinix's Japanese subsidiary.

The acquisition, if consummated, would make Equinix the fourth largest data center operator in Japan. Equinix would acquire five data centers in Tokyo and one in Osaka, close to its Equinix International Business Exchange (IBX) data centers in Japan. After the completion of its newest data center in the country, TY5, in Q1 2016, Equinix would have 10 IBX data centers in Tokyo and two in Osaka.

The total share price represents an offer price of JPY922 per share ($7.70). The Bank of Tokyo-Mitsubishi has committed to provide a one-year senior bridge term loan facility to fund the transaction. The tender offer is expected to run from September 9, 2015 to October 26, 2015, but could be extended. The offer is conditioned on, among other things, the tender by Bit-isle shareholders of more than 66 2/3% of the Bit-isle shares. If the conditions to the tender offer are satisfied, Equinix will acquire any remaining shares under Japanese corporate law. Equinix expects to complete the deal by early 2016.

Bit-isle's board of directors has agreed to endorse the tender offer, and major shareholders Warehouse Terrada, Kohei Terada, and Yasunobu Terada have agreed to tender all of their shares, which combined represent 29.74% of Bit-isle's shares on a fully diluted basis.

"With the acquisition of Bit-isle, Equinix will be in a strong position to attract Japanese enterprises," predicted Steve Smith, president and CEO of Equinix. "Both Equinix and Bit-isle have the same vision for cloud computing, and Bit-isle's five data centers are in the best locations in Tokyo. The company's strong local leadership, business, and network operations teams will greatly enhance our strength in this important market and we look forward to bringing them into the Equinix family."

For more information on high-speed transmission systems and suppliers, visit the Lighwave Buyer's Guide.