Equinix sells off 16 data centers to investment group for $75M
Equinix (Nasdaq: EQIX) on Tuesday shed itself of 16 of its International Business Exchange (IBX) data centers in the United States, selling them to an investment group consisting of 365 Main, Crosslink Capital and Housatonic Partners, for $75 million.
When the sale is complete in Q4 2012, 365 Main, a data center provider led by Chris Dolan, CEO, and Jamie McGrath, COO, will run and own the new data centers.
By making this acquisition, 365 Main, which currently operates five facilities plus a sixth that it's still building out, will have a total of 22 data centers.
With this sale, Equinix will exit nine markets, including Buffalo, Cleveland, Detroit, Indianapolis, Nashville, Phoenix, Pittsburg, St. Louis and Tampa. However, the other seven data centers are in markets where the provider will retain a presence in because it still sees strong demand from customers. It will continue to provide services out of sites in Chicago, Reston, Va., Dallas, New York City, Philadelphia, Seattle, and San Jose.
Current Equinix customers located in these 16 centers will become 365 Main customers. Likewise, employees who have experience with these sites will join 365 Main to ensure customer operations are not impacted during the transition process.
Equinix said that the 16 data centers it is selling generate less than 2 percent of its annual revenues.
Charles Meyers, president of the Americas for Equinix, said that "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."
Equinix has been aggressively expanding its presence in key domestic and international markets throughout the past three years.
Beginning with its acquisition of Switch and Data in 2010--a move that expanded its data center presence in the United States and Canada--Equinix has enhanced its presence in three key international regions: Asia Pacific, Europe, and Latin America, via its own organic growth initiatives and targeted acquisitions.
Purchasing Asia Tone gave the service provider expanded its Asia Pacific presence, while its acquisitions of ancotel and ALOG with private equity partner Riverwood Capital enhanced its ability to target opportunities in Europe and Latin America.
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