Divests assets in non-core markets; sharpens focus on developing ecosystems in high-performing data centers
REDWOOD CITY, Calif.–(BUSINESS WIRE)–
Equinix, Inc. (NASDAQ: EQIX), a provider of global data center services, today announced plans to sell 16 International Business Exchange™ (IBX®) data centers located throughout the United States to an investment group consisting of 365 Main, Crosslink Capital and Housatonic Partners in a transaction valued at approximately $75 million. After the close of the transaction, 365 Main will own and manage the 16 data centers, led by industry veterans Chris Dolan, CEO, and Jamie McGrath, COO. The transaction is expected to close in Q4 2012, subject to customary closing conditions.
“As we sharpen our focus on developing business ecosystems, we are prioritizing the largest global markets required by our targeted customers and applications that are driving growth across Platform Equinix,” said Charles Meyers, president of the Americas for Equinix. “We believe the divestiture of these assets will allow us to focus our capital and energy on our most productive data centers and will ensure that customers at these sites will be supported by an experienced data center operator that will continue to invest in these locations. We are excited to partner with 365 Main to make this transaction a success.”
“We have been continuously evaluating the data center market and believe the opportunity to enter 16 U.S. markets creates a solid platform for 365 Main,” said Chris Dolan, president and founding partner, 365 Main. “We are pleased to be back in this industry and to draw on our 15 years of data center experience to deliver on our strong reputation for customer service and retention.”
Nine of the 16 data centers are in markets Equinix will exit with the close of the sale. Those markets include Buffalo, Cleveland, Detroit, Indianapolis, Nashville, Phoenix, Pittsburg, St. Louis and Tampa. The remaining seven data centers are in markets where Equinix will retain a presence and currently has sufficient capacity to meet customer demand. These sites include CH6 (427 La Salle, Chicago), DC9 (11513-19 Sunset Hills Road, Reston, VA), DA5 (4101 Bryan St., Dallas), NY10 (65 Broadway, New York), PH2 (3701 Market St., Philadelphia), SE1 (1914 Third Ave., Seattle), and SV7 (534 Stockton Ave., San Jose).
The 16 sites represent approximately 280,000 total gross square feet of data center space. The Equinix customers deployed in the 16 data centers will be transferred to 365 Main as part of the transaction. Additionally, key employees who have experience with these sites and their customers will be joining 365 Main to facilitate a seamless transition and ongoing support for customers.
Equinix estimates that the 16 data centers generate less than two percent of the company’s annual revenues. With the announcement of this transaction, the financial results derived from these 16 data centers will be excluded from Equinix’s continuing operations for the quarter and will be reflected as discontinued operations. As a result, Equinix will retroactively adjust its financial results for all applicable prior periods beginning April 30, 2010, the date the company acquired these assets, to reflect them as discontinued operations as required under accounting principles generally accepted in the United States of America.
For this transaction Davis Polk & Wardwell LLP and The Bank Street Group LLC served as legal and financial advisors to Equinix.
About 365 Main
365 Main was founded in 2002 by industry leaders Chris Dolan and James McGrath. 365 Main began with a single data center based in San Francisco, CA, eventually operating five facilities nationwide. The data centers were developed and certified to the highest industry standards and compliance requirements, including SAS70, and feature 24/7/365 power, cooling, connectivity and security capabilities to ensure mission-critical operations and business continuity. Building itself from a “retail” model at its San Francisco facility into the industry leader of mid-market/ multi-tenant wholesale data centers proved to be the success for 365 Main that resulted in the sale of five of its facilities to Digital Reality Trust in 2010. 365 Main built up a portfolio of six data center assets with 39 megawatts of power under management across the United States. The company earned its reputation for high-touch customer service, satisfaction and retention. With its years of experience in modern data center operations, 365 Main has proven to be capable of managing customers with broad requirements. 365 Main is a privately held company based in San Francisco, Calif. More information is available at 877-365-MAIN (6246) or www.365main.com.
Equinix, Inc. (EQIX) connects businesses with partners and customers around the world through a global platform of high performance data centers, containing dynamic ecosystems and the broadest choice of networks. Platform Equinix connects more than 4,000 enterprises, cloud, digital content and financial companies including more than 900 network service providers to help them grow their businesses, improve application performance and protect their vital digital assets. Equinix operates in 38 strategic markets across the Americas, EMEA and Asia-Pacific and continually invests in expanding its platform to power customer growth. http://www.equinix.com.
Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the failure to complete the contemplated divestiture of the non-core IBX assets, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenue from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; and other risks described from time to time in Equinix’s filings with the Securities and Exchange Commission. In particular, see Equinix’s recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.
Equinix and IBX are registered trademarks of Equinix, Inc.
International Business Exchange is a trademark of Equinix, Inc.
Melissa Neumann, +1 650-598-6098
GolinHarris for Equinix, Inc.
Liam Rose, +1 415-318-4380
Equinix Investor Contacts
Katrina Rymill, +1 650-598-6583
Jason Starr, +1 650-598-6020