Tidbits from the Telx IPO Filing
March 22nd, 2010 By: Rich Miller
The transition from private company to publicly-held stock requires companies to share more details about their operations, including data on financial performance and growth. We examined the Telx Group’s financial performance in Friday’s story about the company’s pending IPO, but here are some additional data points from the company’s IPO filing:
More Interconnections Than Rivals: In recent years Telx has hinted that it had more interconnections than Equinix or Switch and Data, but didn’t release details. In Thursday’s filing, Telx disclosed that its customers have made 28,272 physical interconnections through its facilities. That’s the most in the U.S., ahead of Equinix (25,888) and Switch and Data (22,277), although Equinix has a global total of more than 40,000 due to its European operations. “We believe that our average of 37 physical interconnections per customer gives us greater physical interconnection density than our competitors,” Telx says in its filing. One analyst said the Telx data shows that the carrier-neutral interconnection market is more competitive than believed, which could help boost the Equinix-Switch & Data deal, which has been undergoing antitrust review from the Justice Department.
Ethernet Expansion: Telx has a history of strength in the telecom market, but entered the IP peering market in 2008. The company’s growth plans include a larger focus on Ethernet, the company confirmed. “We plan to introduce an Ethernet Exchange product and related services during 2010,” Telx said in its filing. “The Ethernet Exchange will allow the efficient interconnection of geographically dispersed Ethernet based products and related services through virtual interconnection. As a result, Ethernet service providers will be able to expand their geographic reach and connect to new customers.”
Sturdy Takeover Defenses: Telx said it has taken steps to reduce the possibility of an unwanted acquisition bid from third-parties who can purchase shares on the open market. “We will have a number of anti-takeover devices in place that will hinder takeover attempts and could reduce the market value of our common stock or prevent sale at a premium,” Telx said in its filing. “Our authorized but unissued common stock and preferred stock may prevent a change in our control.”
No Dividends Expected: “After the completion of this offering, we do not anticipate declaring any cash dividends to holders of our common stock in the foreseeable future,” Telx said in its filing, which noted that its existing credit facilities prohibit the company from paying cash dividends.