Equinix, Inc. has announced it has entered into a definitive agreement to purchase a portfolio of 24 data center sites and their operations from Verizon Communications Inc. for $3.6 billion in an all cash transaction. The 24 sites consist of 29 data center buildings across 15 metro areas. The addition of these strategic facilities and customers will further strengthen Equinix's global platform by: increasing interconnection in the U.S. and Latin America; opening three new markets in Bogotá, Culpeper and Houston; and accelerating Equinix's penetration of the enterprise and strategic market sectors, including government and energy.
"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. 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," said Steve Smith, president and CEO, Equinix.
The acquisition of these assets will enable Equinix customers to further respond to a key market trend that is enabling their evolution from traditional businesses to "digital businesses" — the need to globally interconnect with people, locations, cloud services and data. Additionally, customers will have the opportunity to operate on an expanded global platform to process, store and distribute larger volumes of latency sensitive data and applications at the digital edge, closer to end-users and local markets.
The acquired portfolio includes approximately 900 customers, with a significant number of enterprise customers new to Equinix's platform, and it adds approximately 2.4 million gross square feet. It 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 markets.
The transaction is expected to close by mid-2017, subject to the satisfaction of customary closing conditions.
The transaction includes 29 data center buildings across 24 sites in 15 metro areas, including Atlanta (Atlanta and Norcross), Bogotá, Boston (Billerica), Chicago (Westmont), Culpeper, Dallas (Irving, Richardson-Alma and Richardson-Pkwy), Denver (Englewood), Houston, Los Angeles (Torrance), Miami (Miami and Doral), New York (Carteret, Elmsford and Piscataway), São Paulo, Seattle (Kent), Silicon Valley (Santa Clara and San Jose), and Washington, D.C. (Ashburn, Manassas and Herndon).
The addition of the new data center assets will greatly expand Equinix's global platform for enterprises by adding new markets and Fortune 1000 enterprise customers. It expands capacity in existing markets, such as Atlanta, Denver, Miami, New York, São Paulo, Seattle and Silicon Valley, and it provides a platform for the future expansion of the acquired data centers.
The NAP (Network Access Point) of the Americas facility in Miami is a key interconnection point and will become a strategic hub and gateway for Equinix customer deployments servicing Latin America. Combined with the Verizon data centers in Bogotá and the NAP do Brasil in São Paulo, it will strategically position Equinix in the growing Latin American market.
The NAP of the Capital Region in Culpeper, VA is a highly secure campus focused on government agency customers, strengthening Equinix as a platform of choice for government services and service providers.
Approximately 250 Verizon employees, primarily in the operations functions of the acquired data centers, will become Equinix employees.
Equinix was advised by Evercore, J.P. Morgan Securities LLC and Davis Polk & Wardwell LLP.