Equinix, Inc. has announced that acting through its Japanese subsidiary it has commenced a cash tender offer for all issued and outstanding shares of Tokyo-based Bit-isle Inc. The offer price is JPY922 per share, in an all cash transaction totaling 33.3 billion Japanese Yen or approximately $280 million U.S. dollars. The tender offer period is expected to run from September 9, 2015 to October 26, 2015, unless the tender offer period is 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 move forward to acquire any remaining shares under Japanese corporate law and expects to complete the acquisition of Bit-isle by early 2016. The Board of Directors of Bit-isle has agreed to endorse the tender offer. Additionally, the major shareholders of Bit-isle, Warehouse Terrada, Mr. Kohei Terada and Mr. Yasunobu Terada, have agreed to tender all of their shares, representing 29.74% of Bit-isle shares on a fully diluted basis.
The acquisition of Bit-isle will further strengthen Equinix's position in Asia-Pacific — the company's fastest growing region — improve the company's market position in Japan, and help meet growing demand for interconnection among Japanese businesses. With Bit-isle, Equinix will have strong local expertise to help drive success in Japan.
- With the successful acquisition of Bit-isle, Equinix will gain significant scale by creating the fourth largest data center operator in Japan(). Upon completion of the acquisition, Equinix will gain five data centers in Tokyo and one in Osaka in close proximity to the existing Equinix International Business Exchange (IBX®) data centers in Japan creating campuses for customers' future expansion needs. After the completion of TY5 in Q1 2016, Equinix will have 10 IBX data centers in Tokyo and two in Osaka.
- The combination will accelerate Equinix's cloud and enterprise ecosystem growth as well as create significant cross selling opportunities. Bit-isle complements Equinix's robust cloud and network service provider customer base with their strong Japanese enterprise and system integrator customer base including some of Japan's largest businesses. Those businesses will have immediate access to Equinix's global cloud and network service provider customers, and will be able to leverage Platform Equinix™ to expand into other key markets.
- Equinix Japan has the highest mix of interconnection revenue in the company's APAC region. Bit-isle adds close geographic capacity adjacent to Equinix's carrier dense sites that Equinix can leverage to continue to scale its global interconnection platform. The acquired data centers can be tethered to existing Equinix IBX data centers for campus connectivity to network and cloud service providers, business ecosystems and other enterprises within a metropolitan area.
- The transaction, if completed, is expected to be accretive to Equinix's adjusted funds from operations (AFFO) per share upon close.
- The Bank of Tokyo-Mitsubishi has committed to provide a one-year senior bridge term loan facility to fund the acquisition.