Equinix will pay $800 million in cash and debt for the Infomart Dallas, a major interconnection hub for the Southwest U.S.
The 1.6 million square-foot facility, owned by ASB Real Estate Investments, currently houses four of Equinix’s eight Dallas data centers. “[The acquisition] will increase our percentage of revenues from owned assets to over 45 percent when it closes,” said Peter Van Camp, interim CEO, president, and executive chairman of Equinix, on the company’s fourth quarter 2017 earnings call on Wednesday.
The Infomart deal is expected to close mid-year.
On the Equinix earnings call, Van Camp said the interconnection and colocation giant delivered its 60th consecutive quarter of revenue growth. It also posted annual revenues of $4.4 billion in 2017, up 21 percent from a year earlier.
“We’re well on our way to deliver over $5 billion of revenues in 2018,” Van Camp said, according to a Seeking Alpha transcript.
This is Equinix’s first earnings report since its former CEO Steven Smith resigned suddenly last month after “exercising poor judgment with respect to an employee matter.”
Informart and Interconnection
In an interview with SDxCentral, Jon Lin, vice president for corporate development and strategy at Equinix, said the Infomart facility and Dallas in general are important from an interconnection perspective. The Dallas metro area is one of the largest enterprise and colocation markets in the Americas. And Equinix’s eight data centers in the region house more than 100 network service providers.
“Dallas has grown to be the second-largest data center market in the U.S.,” Lin said. “It’s obviously a key interconnection hub for the Southwest, and it also provides a lot of interconnection going into Latin America. Routes to Mexico, for instance, go through Dallas.”
The Infomart acquisition, coupled with the Verizon data centers that Equinix purchased last year spanning the U.S. and Latin America, “and our existing locations in Los Angeles and Sao Paolo really provides us a big Pan-LatAm strategy,” Lin said.
In addition to closing on the 29 Verizon facilities in 2017, Equinix also bought Australian data center company Metronode for $792 million in cash. That transaction is expected to close in the first half of this year.
HITting Cloud Data Centers
On the earnings call, Equinix executives also provided more details about the company’s strategy to build data centers expressly for hyperscale cloud providers, called the Hyperscale Infrastructure Team, or HIT.
“The Hyperscale Infrastructure Team will focus on developing facilities that are tuned to hyperscale requirements,” Van Camp said. “We are leveraging the combination of existing capacity, including a significant Q4 win with a major cloud provider in London, and dedicated hyperscale builds to target a handful of key markets in 2018. Paris 8 represents our first dedicated build for this initiative, and we have a healthy pipeline of other hyperscale opportunities.”
The first phase of the Paris 8 facility will open this year, Lin said. He wouldn’t say how many of these cloud provider data centers Equinix plans to build.
Equinix executives on the earnings call also hedged when asked for specific details about the company’s new hyperscale initiative.
Charles Meyers, president of strategy, services, and innovation, said the European market presents “the greatest opportunity in that market near term” to build hyperscale facilities. Asia comes in second “and then Americas behind that,” he added.
“I think there’s probably a dozen or more markets that represent very real and appropriate markets for us to consider investing in,” Meyers said.