A map of Equinix's global markets
(WEB HOST INDUSTRY REVIEW) — Data center and hosting provider Equinix (www.equinix.com) and private equity firm Riverwood Capital (www.riverwoodcapital.com) announced on Tuesday that they will acquire about 90 percent of ALOG Data Centers of Brazil (www.alog.com.br/index_enUS.asp) for about $127 million in cash, extending its market reach into South America.
This marks the first major acquisition Equinix has announced this year, following last year’s massive acquisition of rival Switch and Data for $683.4 million.
Equinix will hold controlling interest, Riverwood will hold a significant minority stake and about 10 percent will be held by current members of ALOG’s management team.
Beginning three years following the close of the transaction, Equinix will have the right to acquire 100 percent of ALOG.
Prior to the acquisition, Equinix was operating in 35 markets across North America, Europe and Asia-Pacific.
The investment will extend Platform Equinix to South America, creating a footprint of 95 data centers across 37 global markets.
According to the press release, data center space in Brazil gives Equinix the ability to meet the demand from its network, content, cloud and financial services customers looking to establish a presence in this rapidly growing market.
According to research by JP Morgan, Brazil is expected to become the world’s fifth largest economy by the end of this decade.
“Our investment in ALOG further strengthens Equinix’s position as the most comprehensive global data center provider in the world,” says Steve Smith, president and CEO of Equinix. “ALOG’s strong position in Brazil coupled with a complementary business model give us the opportunity to enter this important emerging market and quickly accommodate our customers’ demands for data center services in South America.”
ALOG provides carrier-neutral data center services in Brazil to about 1,000 customers across its two data centers in Sao Paulo and Rio de Janeiro.
The company is currently expanding its footprint to include a third data center in Sao Paulo suburb, Tamboré, which is on track to deliver Phase 1 capacity by March.
The three ALOG data centers will total about 67,000 square feet of data center space.
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