Equinix To Sell Data Centers For $75M
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REDWOOD CITY, CA-As part of a plan to focus the company’s capital and energy on its most productive data centers, Equinix Inc. has decided to sell 16 IBX data centers throughout the US to an investment group consisting of 365 Main, Crosslink Capital and Housatonic Partners for approximately $75 million. The sites represent approximately 280,000 square feet of space that generates less than 2% of the company’s annual revenues.
After the transaction closes, 365 Main will own and manage the centers, led by industry veterans Chris Dolan, CEO and Jamie McGrath, COO, who started the firm in 2002. The transaction is expected to close in the fourth quarter of this year. Davis Polk & Wardwell LLP and the Bank Street Group LLC served as legal and financial advisors to Equinix during the transaction.
The provider of global data-center services is looking to “sharpen our focus on developing business ecosystems” and is “prioritizing the largest global markets required by our targeted customers and applications that are driving growth across Platform Equinix,” according to Charles Meyers, president of the Americas for Equinix. Meyers says the centers’ disposition will “ensure that customers at these sites will be supported by an experienced data-center operator that will continue to invest in these locations.”
Nine of the 16 data centers are in markets Equinix will exit with the close of the sale. These markets include Buffalo, Cleveland, Detroit, Indianapolis, Nashville, Phoenix, Pittsburgh, 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 427 La Salle, Chicago; 11513-19 Sunset Hills Rd., Reston, VA; 4101 Bryan St., Dallas; 65 Broadway, NY; 3701 Market St., Philadelphia; 1914 Third Ave., Seattle; and 534 Stockton Ave., San Jose, CA.
The customers deployed in the 16 centers will be transferred to 35 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.
As GlobeSt.com previously reported, there are two trends that contribute to the growth of data centers, according to Avner Papouchado, president of Server Farm Realty. “First, the world is going digital and many processes that used to be analog are now done by computer, which exists across all industries.” Second, he says, is the move to the cloud environment. “The personal computer is giving way to smaller devices that allow most of the processing to be done remotely on servers housed in the cloud—all of which are located in data centers. Everything from mail and address book contacts to file storage to gaming is occurring in the cloud.”
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