Equinix Expands Into South America
February 15th, 2011 By: John Rath
Equinix (EQIX) has expanded its global data center footprint into South America by acquiring a majority interest in an existing service provider. Equinix is taking part in a $127 million deal to buy 90 percent of ALOG Data Centers of Brazil. Equinix will hold controlling interest in ALOG, while private equity firm Riverwood Capital will hold a significant minority stake and approximately 10 percent will be held by current members of ALOG’s management team.
Data center and hosting company ALOG (comes from the Italian word Alogis, which means to host, to shelter) serves about 1,200 customers across its two data centers in Sao Paulo and Rio de Janeiro, and in March is expected to finish a third facility in Tambore, a suburb of Sao Paulo. The three data centers will contain a combined 36,000 square feet of data center space.
Infrastructure for World Cup, Olympics
Brazil is a hot emerging market for IT infrastructure, which will be critical to supporting communications services for two global events being hosted by Brazil: the 2014 World Cup and 2016 Summer Olympics in Rio de Janeiro. For Equinix, the deal adds a fourth continent to its network. The company already operates data centers in North America, Europe and Asia.
“Our investment in ALOG further strengthens Equinix’s position as the most comprehensive global data center provider in the world,” said Steve Smith, President and CEO of Equinix. “ALOG’s strong position in Brazil coupled with a complementary business model give us the opportunity to enter this important emerging market and quickly accommodate our customers’ demands for data center services in South America.”
“This investment prudently capitalizes on the significant growth in the demand for IT infrastructure and services in Brazil,” said Francisco Alvarez-Demalde, a founding Partner of Riverwood Capital. “We are very excited about partnering with ALOG and Equinix, combining ALOG’s strong management team and leadership in Brazil, with the Equinix brand and global platform, and our expertise in growing technology businesses in Latin America.”
Just last week Equinix announced expansion into two key European traffic hubs, and added an extra $100 million to their capital budget to build additional data centers in 2011. Equinix also recently reported 2010 financial results, with $1,220.3 million in revenues for 2010, a 38% increase over 2009.
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