Verizon sells US data centre business

By:
Alan Burkitt-Gray
Published on:

Verizon sells 29 US and South American data centres to Equinix for $3.6bn, but keeps business in Europe, Asia-Pacific and Canada

Equinix has announced it will acquire 24 data centre sites and their operations in the US and South America from Verizon for $3.6 billion.

The acquisition brings Equinix’s total global footprint to 175 data centres in 43 markets. The 24 new sites consist of 29 data centre buildings across 15 metro areas, and 250 employees will transfer to Equinix when the deal is closed.

Steve Smith, president and CEO of Equinix, said: “This unique opportunity complements and extends Equinix’s strategy to expand our global platform. It enables us to enhance cloud and network density to continue to attract enterprises, while expanding our presence in the Americas.”

Equinix said that the deal increases its interconnection in the US and Latin America and opens three new markets – in Bogotá, Culpeper and Houston. It increases Equinix’s penetration of the enterprise and strategic market sectors, including government and energy, said the company.

However, Verizon has not sold all its data centre business. The company pointed out that “This transaction aligns with Verizon’s strategy to focus resources in areas that will help drive digital transformation for enterprise customers, while providing world-class service. The sale does not affect Verizon’s managed hosting and cloud offerings, or its data centre services delivered from 27 sites in Europe, Asia-Pacific and Canada.”

The list of Equinix’s acquisitions shows two data centres in South America – Bogotá and São Paulo – and the rest in the US, in places from Santa Clara and San Jose in California to Chicago and Boston.

Smith said: “The new assets will bring hundreds of new customers to Platform Equinix while establishing a presence in new markets and expanding our footprint in existing key metros. The deal will also provide significant value for shareholders as the proposed transaction is expected to be immediately accretive to our adjusted funds from operations per share upon close.”

Karl Strohmeyer, president of Equinix Americas, said: “This deal is a significant win for our existing customers, who will gain access to new locations, ecosystems and partners. It is also a win for the new companies joining Equinix, as they will be able to leverage Equinix’s global footprint and unique interconnection services.”

It is only a year since Verizon denied that it was planning to sell its data centre business. Fran Shammo, then CFO and now executive vice president, told an investor conference that a report that is was selling was “factless conjecture with no foundation”.

Verizon bought the Terremark data centre business in 2011 for $1.4 billion. That acquisition brought 13 data centres in the US, Europe and Latin America into the group.