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Equinix Completes Its $3.8 Billion TelecityGroup Acquisition

Equinix completed its TelecityGroup acquisition in January 2016 for a reported $3.8 billion headline value. Eight facilities were divested afterward to meet European Commission commitments.
From TheFinanceBase Team2 min to read
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Equinix completed its acquisition of TelecityGroup on January 15, 2016, in a transaction the company valued at approximately $3.8 billion (£2.6 billion). The deal combined cash and Equinix shares. Although European Commission clearance required Equinix to divest eight data centers, that sale happened after the acquisition closed.

When did Equinix close the TelecityGroup acquisition?

Equinix announced that the acquisition closed on January 15, 2016, and that TelecityGroup became a wholly owned Equinix subsidiary. The completion announcement described the deal as a roughly $3.8 billion (£2.6 billion) transaction. Equinix’s January 15 announcement filed with the SEC and its Form 8-K record the closing.

How much did Equinix pay for TelecityGroup?

The commonly cited $3.8 billion is a rounded headline value, not an exact accounting total. Equinix’s closing announcement expressed it as approximately $3.8 billion (£2.6 billion). Its SEC Form 8-K described the consideration as approximately $1.7 billion in cash plus 6.8 million newly issued Equinix shares valued at about $2.1 billion.

Equinix’s 2016 Form 10-K later reported purchase consideration of approximately £2.6245 billion, or $3.743587 billion using the exchange rate on the acquisition date, plus assumed vested employee equity awards. The filing also describes offer terms of 572.5 pence in cash and 0.0336 new Equinix shares for each acquired share or equity award. These figures use different reporting bases and levels of rounding; the headline and accounting amounts are not contradictory exact totals. The closing Form 8-K and Equinix’s 2016 Form 10-K provide the respective breakdowns.

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What did Equinix say the acquisition would add?

At closing, Equinix said the combination added seven European markets and more than doubled its European capacity. The company also reported more than 1,000 net new customers, including over 200 network and mobility companies and over 300 cloud and IT services companies. Those are Equinix’s reported figures, not independent measurements of the deal’s later operating results. The completion announcement gives the company’s account of the expansion.

Why did Equinix have to sell data centers?

The European Commission’s clearance of the proposed acquisition was conditional on divestiture commitments intended to address competition concerns. The remedy covered eight facilities: five in London, two in Amsterdam, and one in Frankfurt. Equinix listed the sites in its November 13, 2015 clearance announcement; the Commission’s June 15, 2016 decision approving Digital Realty as purchaser describes the remedy and concludes the proposed sale complied with the commitments.

  • London: Bonnington House, Sovereign House, Meridian Gate, Oliver’s Yard, and West Drayton.
  • Amsterdam: Science Park and Amstel Business Park I.
  • Frankfurt: Lyonerstrasse.
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When were the eight facilities sold?

The acquisition and the remedy-related asset sale were separate events. Equinix announced its agreement to sell the eight European assets to Digital Realty on May 16, 2016. The European Commission approved Digital Realty as purchaser on June 15, and Equinix announced completion of the divestiture on July 5, 2016.

Date Event
November 13, 2015 Equinix announced European Commission clearance subject to divestiture commitments.
January 15, 2016 Equinix completed the TelecityGroup acquisition.
May 16, 2016 Equinix announced an agreement to sell eight European assets to Digital Realty.
June 15, 2016 The European Commission approved Digital Realty as purchaser.
July 5, 2016 Equinix announced completion of the asset sale.

The announcements and regulatory record are available from Equinix’s clearance notice, May divestiture agreement, the Commission’s buyer approval, and Equinix’s July completion announcement.

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