Data center operator Equinix announced on Tuesday that it has entered into a definitive agreement to acquire six data centers, including one data center under construction, and one disaster recovery center in Asia. Equinix will acquire the assets from Hong Kong data center firm Asia Tone in an all cash transaction valued at $230.5 million.
According to the press release, the facilities are located across three key markets – Hong Kong, Shanghai and Singapore, where Equinix already has customers.
This news comes a day after telecommunications provider NTT Communications officially opened its Singapore Serangoon data center.
Expected to close in Q3 2012, the deal is expected to significantly expand Platform Equinix capacity in Asia, increasing its footprint to 104 data centers in 38 markets. When the Shanghai data center is complete, it will provide an additional capacity of 80,000 square feet, and is expected to be available in the second half of 2012.
For web hosts that are existing customers of Equinix, this expansion will help them better serve existing customers in Asia, as well as expand services like cloud to new markets. Equinix says that China is the most requested market for Equinix customers looking to expand globally, as it is one of the fastest growing colocation markets in the world.
Equinix already has data centers in Hong Kong, Shanghai, Singapore, so the new facilities from Asia Tone will help bolster its presence in the area even more so.
In addition to acquiring data centers, Equinix gains experienced staff.
“The acquisition of Asia Tone will be an important milestone in establishing market leadership for Equinix in Asia-Pacific,” Steve Smith, president and CEO of Equinix said in a statement. “As our fastest growing region for several years and one in high demand by customers, we see tremendous opportunity for growth. We are especially pleased to expand our footprint in China, which is highly desirable for multi-national customers looking to expand into this high-growth market.”
In a recent report, Frost & Sullivan found that the Asia-Pacific data center market earned revenues of more than $2.55 billion in 2010, and estimates this to reach $9.25 billion by 2017.
Asia Tone generated about $30 million in revenue in 2011, and has been growing at a greater than 50 percent CAGR for the past three years.
According to the press release, the Asia Tone business is expected to be adjusted free cash flow positive in 2013.
“Over the years, Asia Tone has provided colocation and data center services to support the needs of the world’s leading companies as they grow their business in Asia-Pacific,” Charles Lee, CEO for Asia Tone said in a statement. “Asia Tone’s footprint in Hong Kong, Shanghai and Singapore combined with Equinix’s global reach will better serve growing demand from global customers looking to expand in Asia.”
Talk back: Are you seeing more demand for cloud services in Asia? What areas in particular are you looking to expand in Asia? Let us know in a comment.