Equinix Boosts Asia Footprint With $230M Deal

Equinix continues to expand its data center footprint in Asia, opting to buy rather than build with a $320 million acquisition of Hong Kong-based data center provider Asia Tone. The acquisition expands Equinix’ presence in three key growth markets – Hong Kong, Shanghai and Singapore – and includes five data centers and one disaster recovery center, as well as one data center under construction.

“The acquisition of Asia Tone will be an important milestone in establishing market leadership for Equinix in Asia-Pacific,” said Steve Smith, president and CEO of Equinix. “As our fastest growing region for several years and one in high demand by customers, we see tremendous opportunity for growth. We are especially pleased to expand our footprint in China, which is highly desirable for multi-national customers looking to expand into this high-growth market.”

Buying Asia Tone provides Equinix with high-quality data centers – it now has 104 data centers in 38 markets – as well as experienced staff to meet strong demand from network, cloud, financial services and content customers in the Asia-Pacific market.

As part of the deal, Equinix will gain a new facility in Shanghai that, when completed, will provide additional capacity of 80,000 square feet of data center space. This new Shanghai data center will support global customers looking to expand into the region and is expected to be available in the second half of 2012.

This isn’t the first foray by Equinix into Shanghai. In 2010 Equinix announced a strategic partnership agreement with Shanghai Data Solution Co., Ltd (SDS), a leading systems integrator for network and communications services in China. Asia Tone offers Equinix a larger footprint with the new data center.

“Over the years, Asia Tone has provided colocation and data center services to support the needs of the world’s leading companies as they grow their business in Asia-Pacific,” said Charles Lee, CEO for Asia Tone. “Asia Tone’s footprint in Hong Kong, Shanghai and Singapore combined with Equinix’s global reach will better serve growing demand from global customers looking to expand in Asia.”

Asia Tone generated approximately $30 million in revenue in 2011, and has been growing at a greater than 50 percent growth rate for the past three years. The Asia Tone business is expected to be adjusted free cash flow positive in 2013.

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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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