Tuesday, October 20, 2009

Equinix to Acquire Switch and Data for $689 Million

Equinix has agreed to acquire Switch & Data Facilities Company (Nasdaq:SDXC) approximately $689 million in cash and stock. Both companies provide colocation, data center and Internet exchange services.

With the merger, 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 one million gross square feet of data center capacity, bringing Equinix's total global footprint to 79 data centers in 34 markets and more than six million square feet across the North American, European and Asia-Pacific markets. It will allow Equinix to immediately expand into new strategic markets, including Atlanta, Denver, Miami, Seattle and Toronto, as well as provide a platform for future expansion of Switch and Data assets. New geographic markets for Equinix include Atlanta, Denver, Miami, Seattle and Toronto.

The companies cited two broad market trends as the rationale for their merger. The rapid growth of demand for online information is requiring companies to store and distribute larger volumes of latency sensitive assets and applications at the network edge, near local population centers. At the same time, the market compels companies to develop global aggregation and distribution strategies for their digital assets and applications.

Separately, Equinix reported Q3 2009 revenues of $227.6 million, a 7% increase over the previous quarter, and a 24% increase over the same quarter last year. Recurring revenues, consisting primarily of colocation, interconnection and managed services, were $218.3 million for the third quarter, a 6% increase over the previous quarter, and a 26% increase over the same quarter last year.