In a rare slimming down move by the data center industry's most aggressive buyer, Equinix (NASDAQ:EQIX, news, filings) announced plans this morning to make itself smaller by selling off 16 of its IBX data centers around the US. The buyer is 365 Main, backed by Crosslink Capital and Housatonic Partners which will enter 16 new markets via the purchase.
Equinix is basically cleaning things up following its many acquisitions over the past few years, particularly the Switch and Data deal. They are exiting the nine second tier markets of Buffalo, Cleveland, Detroit, Indianapolis, Nashville, Phoenix, Pittsburg, St. Louis and Tampa, while divesting a few excess major market assets as well: CH6, DC9, DA5, NY10, PH2, SE1, and SV7. It all adds up to some 280,000 square feet of space that Equinix decided was non-core.
Meanwhile, 365 Main will be expanding dramatically, adding not just infrastructure but also taking on some Equinix employees as well. It's an interesting reversal, as the company sold off its 5 facilities back in 2010 to Digital Realty. With new backers in tow, CEO Chris Dolan and COO Jamie McGrath are ready to move back into the fray.
Financially, Equinix estimates that these facilities generate less than 2% of the company's revenues, which translates to less than $40M annually. The deal is expected to close in the fourth quarter, but will be reflected in the company's results retroactively as discontinued operations.