Equinix will acquire US data center operator Switch & Data for $689 million in cash and stock, the companies announced Wednesday.
Equinix offered $19.06 for each Switch & Data share, a premium of 33% over the Wednesday opening price. Switch & Data’s stock rose 26.39% to $18.20 in after-hours trading on Nasdaq. Equinix’s stock fell 4.64%.
Equinix, a US-based data center firm with operations worldwide, said the deal enabled it to extend its presence into 16 new markets in North America. Switch and Data runs 35 34 data centers in 22 markets in the US and Canada.
Equinix said the acquisition would add more than 1 million square feet in data center capacity. It now has more than 6 million square feet in to 79 facilities worldwide.
The acquisition would help Equinix take advantage of the need for companies to “store and distribute larger volumes of latency sensitive assets and applications at the network edge, near local population centers,” the company said in a statement.
“Our complementary business models, coupled with Switch and Data’s broad North American market coverage, provide a platform for strong growth as well as an opportunity,” said Equinix CEO Steve Smith.
The parties are targeting completion of the deal in the first quarter of 2010.
In its Q3 result, posted yesterday, Equinix recorded net income of $18.8 million, up from $17.4 million in the previous quarter and $5.6 million a year ago. Revenue increased 7% sequentially and 24% year-on-year.