It may seem like Equinix (NASDAQ:EQIX, news, filings) has datacenters just about everwhere, but until this morning there were two entire populated continents they had not penetrated. But today that number has fallen to just one, as in an SEC filing today Equinix revealed its route into South America by participating in a joint venture buyout of ALOG Data Centers do Brasil S.A. The purchase price is R$211M, which works out to about $127M.
So who is ALOG? A carrier neutral data center provider with two existing facilities, one in Sao Paulo and one in Rio de Janeiro, and a third under construction in a Sao Paulo suburb called Tambore. When complete, the three facilities will total 36,000 square feet. ALOG also offers a hosting and nascent corporate cloud product. It's not huge like one would expect in the big carrier hotel clusters in the US, but then neither is the South American market. Yet anyway, the region is hot these days - which is why Equinix is getting a foothold.
Equinix will be the majority shareholder in the joint venture, Riverwood Capital will hold a significant minority, and ALOG's management will exchange its 10% interest in the current company for approximately the same fraction of the joint venture. Equinix will be able to buy out Riverwood's interest between 2014-2016 under some circumstances. I do wonder why Equinix didn't just buy ALOG ans swallow it whole though, it's not as if they don't have the means.
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!Categories: Datacenter · Mergers and Acquisitions