Equinix, Inc. has announced that it has completed the acquisition of TelecityGroup plc in a transaction valued at approximately $3.8 billion (£2.6 billion). The addition of TelecityGroup's 40+ data centers more than doubles Equinix's capacity in Europe, fortifying its position as the largest retail colocation provider in the region. The acquisition expands the company's interconnection platform in key European markets while also adding critical network and cloud density to better serve enterprise customers who see interconnection as a core IT design principle and are increasingly moving to highly interconnected, global data centers for accelerated business performance and innovation.
In order to meet changing business needs, global enterprises continue to outsource IT, but increasingly require connectivity to service providers and business partners in multiple markets — a key benefit of Equinix's global interconnection platform. Today, 54% of Equinix's revenue comes from customers deployed globally across all three of its regions (Americas, APAC and EMEA), and over 83% of revenue is from customers deployed across multiple metros, a reflection of the company's differentiated scale and global reach. With new data centers and increased interconnection in Europe, Equinix builds on its global market leadership, and creates new opportunities to grow business ecosystems around the world.
The acquisition of Telecity enhances Equinix's existing data center portfolio by adding seven new markets in Europe and provides customers even more ways to connect with other businesses around the world on Platform Equinix™. Equinix will add data center facilities in Bulgaria, Finland, Ireland, Italy, Poland, Sweden, and Turkey.
"Today is a very important day for Equinix as we close the acquisition of Telecity, which is a significant milestone in our 17-year history. By increasing the scale of the Equinix interconnection platform in key markets throughout Europe, we are able to better serve global enterprises while creating meaningful shareholder value," said Steve Smith, president and CEO, Equinix.
Through the acquisition, Telecity brings more than 1,000 net new customers to Equinix, including more than 200 network and mobility companies and more than 300 cloud and IT services companies. This further strengthens the business ecosystems found inside of Equinix International Business Exchange IBX® data centers and provides customers with the broadest choice of service providers for IT and multi-cloud deployments to accelerate business performance.
Equinix has made three acquisitions in the last twelve months including professional services company Nimbo in the U.S. in January 2015 and Bit-isle in Japan in November 2015. The Telecity and Bit-isle acquisitions significantly expand Equinix's global platform (after planned divestitures) from 105 data centers in 33 metros to 145 in 40 metros.
Originally announced in May as a recommended cash and share offer, the transaction was approved earlier this week by Telecity shareholders and the scheme of arrangement used to implement the acquisition was approved by the applicable court in the United Kingdom, both steps required for closing the transaction.
The transaction was comprised of a cash payment of approximately $1.7 billion and the issuance of approximately 6.8 million shares of Equinix common stock valued at approximately $2.1 billion based on the closing price of Equinix common stock as of January 14, 2016. This amount excludes any value attributed to the Telecity employee equity awards assumed, which will be finalized at a later date.
Equinix's EMEA President, Eric Schwartz, will serve as the head of the combined regional business in EMEA and Telecity's chairman, John Hughes, will be joining the Board of Directors of Equinix, Inc.
Hughes was previously executive chairman of TelecityGroup.
"John brings a wealth of industry experience, having led one of the largest data center providers in EMEA, and having held senior positions at major global technology brands" said Peter Van Camp, chairman of the Board of Directors, Equinix. "His institutional knowledge gained from running Telecity will be invaluable in making the integration of the two companies a success."
Hughes has more than thirty years' experience leading complex, high technology businesses operating at a global level from which to draw in his role at Equinix. As executive chairman at Telecity since 2014 and non-executive chairman from 2007 to 2014, Hughes led the Board of Directors, managed the company and led the development of company strategy over the last eight years. Prior to Telecity Hughes held senior executive positions at Thales Group (where he was latterly executive vice president and chief operating officer, responsible for an organization with over 25,000 people); Lucent Technologies (where his responsibilities included being President of its worldwide GSM and UMTS businesses); and Hewlett Packard. Hughes has significant experience in managing growth companies, especially those supplying complex solutions and services to business customers; in mergers and acquisitions; in international/channel expansion; and in development of leadership teams.
Commenting on his appointment, Hughes said, "I am delighted to be joining the Board of Equinix at what is a fascinating point in the Company's growth and look forward to adding value not only related to the integration of Telecity, but also more broadly in the context of Equinix's strategy and development, and to working with a great group of people."
Hughes holds or has held a number of Board positions including Chairman of JUST EAT plc, Spectris plc, Sepura plc, and as an Independent Non-Executive Director on the Boards of CSG International, Chloride Group, Global Crossing Telecommunications, Barco, Nice Systems and Intec Telecom.
Equinix will further discuss the financial results of the Telecity and Bit-isle acquisitions during its regularly planned Q4 earnings call in February 2016.