Equinix Buys Switch & Data for $689 Million
October 21st, 2009 By: Rich Miller
In a blockbuster deal for the U.S. colocation sector, Equinix (EQIX) has agreed to acquire Switch & Data Facilities (SDXC) for $689 million in cash and stock, the companies said today. The deal is priced at $19.06 a share, representing a 32 percent premium to Switch and Data’s closing price of $14.40.
The deal combines two of the largest players in the market for colocation and interconnection services, and gives Equinix a presence in 16 new markets across North America, including Atlanta, Denver, Miami, Seattle and Toronto.
“As we have moved to a global service delivery platform with the integration of our European and Asia-Pacific operations, we have seen increasing customer demand in existing and new markets to provide solutions to support lower latency application requirements into new markets and additional key Internet markets,” Equinix said in an FAQ about the deal.
Deal Adds 1 Million SF of Space
Equinix will integrate Switch and Data’s data center business and operations, including the company’s 34 data centers in 22 markets in the U.S. and Canada. The acquisition will add more than 1 million gross square feet of data center capacity, bringing Equinix’s total global footprint to more than 6 million square feet across 79 data centers in 34 markets in North America, Europe and Asia-Pacific.
“The strategic acquisition of Switch and Data by Equinix further strengthens Equinix’s position as the most comprehensive global data center services provider across North America, Asia-Pacific and Europe,” said Steve Smith, president and CEO of Equinix. “Our complementary business models, coupled with Switch and Data’s broad North American market coverage, provide a platform for strong growth as well as an opportunity to accommodate our customers’ demands for additional services.”
While Equinix has focused its business on the major Internet and financial markets, Switch and Data has built a network of carrier-neutral data centers that extends into second-tier markets. It also has a strong interconnection business built upon its acquisition of peering pioneer PAIX in 2002.
Focus on Financial Sector
In recent months Switch & Data has sharpened its focus on hosting high-value trading applications for financial institutions, a key strategic market in which Equinix is among the market leaders. Last year Switch and Data opened a large new data center in North Bergen, N.J. where it now hosts several financial tenants.
“The combination of Switch and Data’s North American site footprint and Equinix’s global reach will increase our addressable market, enhance our customers’ value, and drive incremental value to our stockholders,” said Keith Olsen, president and CEO of Switch and Data.
The companies intend to complete the transaction in the first quarter of 2010.
Switch and Data stockholders will have the opportunity to elect to receive either 0.19409 shares of Equinix stock or $19.06 in cash for each share of Switch and Data stock. The overall consideration to be paid by Equinix in the acquisition will be 80% Equinix stock, 20% cash.
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wow its a huge amount
when was the deal done