Equinix acquiring UK rival Telecity for £2.35 billion

Equinix Inc announced on Friday that it is acquiring its UK rival Telecity Group in a deal worth £2.35 billion ($3.6 billion), representing one of the largest takeovers in the cloud-based internet sector.

Telecity, the London-based carrier-neutral datacentre and colocation centre provider, said in a statement that its board recommended the offer by Equinix, which means that the planned merger between Telecity and its Dutch rival Interxion is off the table.

Equinix Telecity takeover

An ever-growing number of businesses are outsourcing data management and information technology to companies such as Equinix and Telecity, who position their data centres near densely populated urban areas.

According to the WSJ, the deal creates “Europe’s largest data center operator and comes amid rising demand for data centers.”

Eric Schwartz, Equinix’s president of Europe, the Middle East and Africa, said:

“There is a very sizable market opportunity here in Europe that companies are looking to exploit,”

Equinix CEO, Steve Smith, said that he had his eye on Interxion and Telecity as targets, but decided to go with Telecity because it was more of a fit.

“Their customer base and footprint are more complementary to where we needed to go next,” Smith said.

Equinix offered 1,145 pence per share for Telecity. Telecity shareholders will own approximately 10.1% of the combined firm.

Video – What is takeover?

This article explains what takeovers (acquisitions) are, and how they differ from mergers.