Equinix Closes $3.6 Billion Verizon Data Center Purchase
Equinix has completed its $3.6 billion all-cash acquisition of 29 Verizon data centers, adding hundreds of new customers.
Spread across 15 cities, the Verizon assets significantly expand the company’s operations in North and Latin America, and they add key government and energy customers, Equinix said.
The deal brings the IBX data center and colocation company into three new markets — Bogotá, Houston and Culpepper, Virginia, while expanding its presence in areas including Atlanta, Denver, Miami, New York, São Paulo, Seattle and Silicon Valley.
Approximately 250 Verizon employees, most in data center operations, became Equinix employees when the deal closed today. Verizon sold the data centers to better focus on its core networking services.
In a statement, Equinix CEO Steve Smith said the deal makes the company’s platform more valuable to customers who are looking to move away from traditional centralized infrastructure in favor of a distributed model that keeps data close to the customers, partners and employees using it.
As of the end of the first quarter, 83 percent of Equinix’s recurring revenue came from customers deployed in multiple metros.
Of the more than 1,000 customers across the 29 data centers, more than 600 are new to Equinix. They include Fortune 1000 companies and federal and local government entities.
Verizon will become a much larger Equinix customer, and it remains a strategic partner. In March, Equinix announced an agreement for Verizon to exclusively sell its colocation and interconnection services globally.
The acquisition includes important facilities such as the Miami NAP of the Americas, a key interconnection point for companies serving Latin America. The facility is the fourth largest Internet exchange point in the United States, interconnecting 150 countries, according to Equinix.
The Culpepper, Virginia facilities, designed to meet high government standards, are among the most secure and technologically sophisticated data centers in the eastern U.S., the company said.
Equinix expects the deal to grow its presence in Latin America and strengthen its relationships in the government sector.
The deal brings Equinix’s global footprint to more than 175 data centers in 44 markets. It adds three million square feet of data center space.
The news comes less than a month after Equinix announced a major expansion of its worldwide data center footprint, opening five new data centers and expanding 14 existing IBX data centers in 2017 as part of a $1 billion expansion plan.
The first location in São Paulo, Brazil opened in March. New data centers in Frankfurt, Amsterdam, San Jose and Washington D.C. are scheduled to open in the second and third quarters.
Redwood City, California-based Equinix grew significantly in 2016 as well, opening new data centers in key economic hubs including Dallas Sydney and Tokyo.
Equinix has reported 57 consecutive profitable quarters.
The data center market has been a hotbed for M&A activity in recent months.