LONDON, UK / ACCESSWIRE / October 11, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Equinix, Inc. (NASDAQ: EQIX), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/'symbol=EQIX. The Company announced on October 09, 2017, that it completed the acquisition of Istanbul-based Zenium data center business on October 06, 2017. This move would help strengthen the Company's position in the European market. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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Equinix has agreed to pay $93 million to the existing shareholders of Zenium in an all-cash transaction. The Zenium data center presently generates around US$2.5 million of annualized revenues.
Acquisition Will Help Equinix Meet Growing Demand
After the acquisition, the Zenium data center will be renamed as Equinix IS2. Istanbul, which is Turkey's largest metro city, serves as a strategic gateway between Europe and Asia. The city holds critical economic as well as geopolitical importance. IS2 would help Equinix expand its capacity and provide the growth path, which would enable Equinix to fulfill the growing demand for colocation and interconnection services in Turkey.
Eric Schwartz, President - EMEA at Equinix, highlighted that the dynamic evolution of digital technology is disrupting the way in which business is done across all industries. To successfully navigate this phase, Companies are required to develop new, information-centric business models. Mostly, these business models rely on interconnection and distributed IT architecture. Turkey, located strategically, is a growth-oriented economy. And Istanbul has developed as an important hub for connectivity as well as technology infrastructure. Thus, the new campus in Istanbul would help Equinix meet demand from customers across its global customer base.
Zenium Leadership Views about the Transaction
Franek Sodzawiczny, CEO and founder of Zenium, also congratulated Equinix for this transaction. He mentioned that the acquisition would help Equinix focus on its business in Western Europe. The technological infrastructure in Turkey is rapidly progressing and businesses are demanding greater interconnection services to compete effectively. He stated that the acquisition represents a great opportunity for Equinix to lead this flourishing data center business forward.
Strategic Benefits for Equinix
Stronger position in Turkish Market: As per International Monetary Fund, Turkey has the world's 17th largest nominal GDP, with a population of nearly 80 million people. The purchase of IS2 would enhance Equinix's capability to offer Turkish businesses with direct and secure connectivity, which they need to expand their reach in new as well as existing markets. As of now, Equinix operates a single facility, i.e. IS1 in Istanbul, which has 67 International Business Exchange data centers across Europe and the Middle East, strategically located in 18 metropolitan areas across 13 countries.
Increment in Colocation Space: The Zenium business comprises three buildings and land. The IS2 data center building is somewhat fitted out; while the two other buildings are shell and core and prepared for data center fit out. IS2 would provide Equinix with 1,500 square meters of colocation space immediately with the option to increase it to 12,000 square meters and up to 22MW of critical customer load at full build. This would, in turn, create capacity for a future campus environment.
Improved Connectivity: The IS2 data center already has 10 networks, including Turk Telecom. This offers a network choice for multinationals, hyperscalers, and IT vendors who use Istanbul as a regional headquarters or a gateway to markets in Asia and the Middle East. The enhanced connectivity is also a foundation for cloud adoption as enterprises continue to increase IT consumption of cloud-related services to accelerate their business performance.
Access to Growing European Market: Global Interconnection Index measures and forecasts the growth of Interconnection Bandwidth. As per the index, Europe is projected to grow 44% per annum to reach 1,451 Tbps of installed capacity by 2020. Main drivers for this growth include data sovereignty and the need for European businesses to exchange information with other businesses in-region.
Istanbul, developing as a regional hub for many industries: Istanbul is an important traffic route for submarine cables between Europe, Asia, and Africa. These cable systems permit greater traffic globalization and data consumption, as well as rapid growth of cloud and online services. Thus, they are extremely important for industries that rely on low-latency connectivity, such as the online gaming and CDNs, most of which treat Istanbul as a regional hub now.
Financial and Legal advisors
For this transaction, Slaughter and May served as the lead external legal advisor for Equinix, while RBC Capital Markets acted as Zenium's financial advisor.
About Equinix
Equinix connects world's leading businesses to their customers, employees as well as partners through its interconnected data centers. Equinix, which is present in 44 markets across five continents, offers an avenue for Companies to come together to realize new opportunities and accelerate their business, IT, and cloud strategies.
Last Close Stock Review
At the closing bell, on Tuesday, October 10, 2017, Equinix's stock was marginally up 0.13%, ending the trading session at $451.89. A total volume of 258.98 thousand shares have exchanged hands. The Company's stock price surged 3.38% in the last three months, 13.02% in the past six months, and 26.79% in the previous twelve months. Moreover, the stock rallied 26.43% since the start of the year. The stock is trading at a PE ratio of 166.26 and has a dividend yield of 1.77%. The stock currently has a market cap of $35.03 billion.
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