Equinix Expands to South America
15/02/2011 - CNBC
EQUINIX EXPANDS TO SOUTH AMERICA; INVESTS WITH RIVERWOOD CAPITAL TO ACQUIRE CONTROLLING INTEREST IN ALOG DATA CENTERS OF BRAZIL
(Nasdaq:EQIX), a provider of global data center services, and Riverwood Capital, a technology-focused private equity firm, today announced that they have entered into a definitive agreement to acquire approximately 90 percent of ALOG Data Centers of Brazil S.A. in an all cash transaction valued at approximately $127 million. Equinix will hold controlling interest, Riverwood will hold a significant minority stake and approximately 10 percent will be held by current members of ALOG’s management team. Beginning three years following the close of the transaction, Equinix has the right, and in certain circumstances may be required, to acquire 100 percent of ALOG.
The investment will extend Platform Equinix to South America, creating a footprint of 95 data centers across 37 global markets. Data center space in Brazil gives Equinix the ability to satisfy strong demand from its network, content, cloud and financial services customers looking to establish a presence in this rapidly growing market.
“Our investment in ALOG further strengthens Equinix’s position as the most comprehensive global data center provider in the world,” said 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 is among the leading carrier-neutral data center services providers in Brazil and serves approximately 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 Tambore (a suburb of Sao Paulo), which is on track to deliver Phase 1 capacity by March 2011. Combined, the three ALOG data centers will total approximately 67,000 square feet of data center space.
Sidney Breyer , CEO of ALOG, will continue to lead the ALOG team in Brazil with the support of Equinix and Riverwood. “For more than a decade, ALOG has provided data center services to support the needs of the world’s top corporations in Brazil,” said Breyer. “These businesses rely on ALOG to connect and safeguard their mission-critical applications. The combination of ALOG’s footprint in Brazil and Equinix’s global reach will better serve growing worldwide demand for data center services.” According to JP Morgan, by the end of this decade Brazil is expected to become the world’s fifth largest economy. Gartner estimated that Brazil’s total end-user IT spending would reach $101.3 billion in 2010, representing 9.6 percent of its real gross domestic product (GDP), and named Brazil the second-largest IT market within emerging economies after China.
“This investment prudently capitalizes on the significant growth in the demand for IT infrastructure and services in Brazil,” said Francisco Alvarez-Demalde, a founding Partner of Riverwood Capital. “We are very excited about partnering with ALOG and Equinix, combining ALOG’s strong management team and leadership in Brazil, with the Equinix brand and global platform, and our expertise in growing technology businesses in Latin America.” About ALOG ALOG Data Centers of Brazil is a leading carrier-neutral data center provider in Brazil and serves approximately 1,000 customers across its two data centers in Sao Paulo and Rio de Janeiro. ALOG’s name comes from the Italian word Aloggiare, which means to host, to shelter.
ALOG’s 410 qualified professionals provide co-location and related services. The company follows ITIL orientations and has assured quality by a management system certified with ISO 9001:2008. ALOG also received the SAS70 level II seal. More information about ALOG is available at http://www.alog.com.br/index_enUS.asp.
About Riverwood Capital Riverwood Capital is a globally-focused private equity firm that invests in high-growth businesses in the technology and services industries, across a variety of verticals and geographies. Riverwood was established by a talented group of private equity and technology industry executives, which gives Riverwood a unique combination of operational, strategic, financial and technical insight into investment candidates. The founders group includes Michael Marks, Chris Varelas, Thomas Smach, Nicholas Brathwaite, Francisco Alvarez-Demalde and Jeffrey Parks. Riverwood has offices in Menlo Park, CA and New York, NY and currently has more than 20 investments in North America, Latin America and Asia. Please visit www.riverwoodcapital.com About Equinix Equinix, Inc. (Nasdaq:EQIX) connects businesses with partners and customers around the world through a global platform of high performance data centers, containing dynamic ecosystems and the broadest choice of networks. More than 3,100 enterprises, cloud, digital content and financial companies connect to more than 600 network service providers and rely on Platform Equinix to grow their business, improve application performance and protect their vital digital assets. Equinix operates in 35 strategic markets across North America, Europe and Asia-Pacific and continually invests in expanding its platform to power customer growth.
Learn more at http://www.equinix.com Forward Looking Statements This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include risks and uncertainties associated with our investment in ALOG, including, but not limited to, uncertainties associated with the growth of Brazil’s IT market and its economy as a whole, the risks of international operations and the challenges of realizing expected synergies. We also face other general risks, including, but not limited to, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenue from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; and other risks described from time to time in Equinix’s filings with the Securities and Exchange Commission. In particular, see Equinix’s recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.
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