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Digital Realty’s 2016 Purchase of Eight Equinix Data Centers in Europe

Digital Realty’s 2016 purchase of eight Equinix data centers covered five London facilities, two in Amsterdam and one in Frankfurt. The $874.4 million sale closed July 5, 2016, as a European Commission condition tied to Equinix’s TelecityGroup acquisition.
From TheFinanceBase Team3 min to read
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Digital Realty agreed on May 16, 2016, to buy eight European data-center assets from Equinix for $874.4 million. The transaction closed on July 5, 2016. Equinix said the divestiture was required by the European Commission as a condition of its approval of Equinix’s acquisition of TelecityGroup.

Why Equinix sold the eight facilities

Equinix completed its acquisition of TelecityGroup in January 2016. In its transaction announcements, Equinix said the European Commission required the sale of these eight assets before clearing that acquisition. The sale was therefore a regulatory divestiture tied to the TelecityGroup deal, not a general withdrawal from Europe.

The May 16 announcement described an agreement to sell. Equinix’s July 5 announcement confirmed that the sale had closed for approximately $874 million, a rounded version of the previously announced $874.4 million consideration.

Which data centers Digital Realty bought

The portfolio comprised five facilities in London, two in Amsterdam and one in Frankfurt:

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Equinix’s May 16 announcement identified the facilities and their prior TelecityGroup or Equinix associations; its closing announcement confirmed the same eight-site list.

What the portfolio represented in 2016

Digital Realty’s May 16, 2016 announcement reported approximately 24.4 megawatts of IT load and more than 650 customers across the acquired portfolio. Those figures describe the assets at the time of the transaction, not their current capacity, occupancy or customer count.

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Digital Realty also reported a weighted-average remaining lease term of approximately 23 years for seven leasehold interests, including contractual extension options. The eighth facility was acquired as a fee interest. These were transaction-era ownership and lease details rather than a promise about later operating arrangements.

The separate St. Denis, Paris arrangement

The Paris property was not one of the eight divested sites. In the May 16 announcement, Equinix said it had an option to acquire Digital Realty’s St. Denis operating business and facility, including the location associated with Equinix’s PA2 and PA3 data centers.

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On July 5, Equinix said it had entered into a separate agreement to buy that Paris operating business and real estate for €189.75 million, approximately $211 million at the announcement’s conversion. The release said the deal was subject to formalities and was expected to close in the third quarter of 2016. The available announcements do not establish its ultimate closing date or present-day status.

Point of comparison Eight-site European divestiture St. Denis, Paris arrangement
Parties Equinix sold to Digital Realty Equinix agreed to acquire from Digital Realty
Assets Eight facilities: five London, two Amsterdam, one Frankfurt St. Denis operating business and facility associated with PA2 and PA3
Announced consideration $874.4 million €189.75 million (about $211 million)
Timing Agreed May 16, 2016; closed July 5, 2016 Announced as an option on May 16; purchase agreement announced July 5, with expected Q3 2016 closing
Regulatory role Divestiture Equinix said was required for European Commission approval of the TelecityGroup acquisition Separate purchase arrangement, not part of the eight-site divestiture
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What the deal means for the historical record

The transaction expanded Digital Realty’s European portfolio while allowing Equinix to satisfy the condition attached to its TelecityGroup acquisition. Digital Realty chief executive A. William Stein said the eight facilities would add scale to the company’s European data-center presence. Equinix chief executive Steve Smith said completion of the sale removed the final milestone in the acquisition process and allowed Equinix to focus on its interconnected global data-center platform.

Because the announcements date from 2016, they should not be used to infer who operates each facility today, what the sites are currently called, their present ownership structure, utilization or current capacity. The documented facts are the announced consideration, the eight named assets, the transaction dates and the historical portfolio metrics reported by the parties.

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

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