Equinix, Inc. (NASDAQ: EQIX) and Verizon Communications Inc. (NYSE, NASDAQ: VZ) say they have reached an agreement through which Equinix will acquire 24 data center sites and their operations from Verizon for $3.6 billion in cash. The 24 sites comprise 29 buildings in 15 metro markets.
The markets and site locations covered in the deal include:
- Atlanta (Atlanta and Norcross)
- Bogotá, Colombia
- Boston (Billerica)
- Chicago (Westmont)
- Culpeper, VA (which has four buildings)
- Dallas (Irving, Richardson-Alma, and Richardson-Pkwy)
- Denver (Englewood)
- Los Angeles (Torrance)
- Miami (Miami and Doral)
- New York (Elmsford, NY, and Carteret and Piscataway, NJ)
- São Paulo, Brazil
- Seattle (Kent)
- Silicon Valley (Santa Clara and San Jose)
- Washington, DC (Ashburn, Manassas, and Herndon, VA).
The Bogotá, Culpeper, and Houston markets will be new for Equinix. The facilities include such prime locations as the NAP (Network Access Point) of the Americas facility in Miami, the NAP of the Capital Region in Culpeper, and the NAP do Brasil in São Paulo. The 29 buildings serve approximately 900 customers, several of which will be new to Equinix as well. Verizon will continue to be a customer at many of these locations; the carrier will retain its managed services business that currently leverages these facilities.
The deal, which is expected to close by the middle of 2017, will bring Equinix's total global footprint to 175 data centers in 43 markets and approximately 17 million gross square feet across the Americas, Europe, and Asia-Pacific.
"This unique opportunity complements and extends Equinix's strategy to expand our global platform. It enables us to enhance cloud and network density to continue to attract enterprises, while expanding our presence in the Americas," explains Steve Smith, Equinix president and CEO. "The new assets will bring hundreds of new customers to Platform Equinix while establishing a presence in new markets and expanding our footprint in existing key metros. The deal will also provide significant value for shareholders as the proposed transaction is expected to be immediately accretive to our adjusted funds from operations per share upon close."
Verizon says it will continue to offer data center services delivered from 27 sites in Europe, Asia-Pacific, and Canada not included in the Equinix acquisition. It would not be surprising if Verizion offloaded some or all of these sites in the future as well.
The sale comes as many service providers reconsider whether they need to own data center facilities to provided managed and cloud services. CenturyLink announced a deal last month to sell its data center assets, for example (see "CenturyLink to sell data centers, colocation business to investor consortium"). Windstream did the same in 2015 (see "Windstream to sell data center business to TierPoint").
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