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Under the terms of the agreement, Switch & Data stockholders will have the opportunity to elect to receive either 0.19 shares of Equinix stock or $19.06 in cash for each share of Switch & Data stock. The overall consideration to be paid by Equinix in the acquisition will be 80% Equinix stock and 20% cash. In the event that holders of more than 80% of Switch & Data's stock elect to receive Equinix stock or holders of more than 20% of Switch & Data's stock elect to receive cash, the consideration will be pro-rated to achieve these proportions. In addition, a portion of the cash consideration payable to Switch & Data stockholders may be replaced by an equivalent amount of Equinix stock to the extent necessary to enable the transaction to qualify as a tax-free exchange.
The cash portion of the consideration will be financed through Equinix's existing cash on hand.
The directors, executive officers, and certain significant stockholders of Switch & Data have agreed to vote shares representing 35% of Switch and Data's outstanding stock in favor of the transaction.
J.P. Morgan Securities, Inc. is acting as financial advisor, while Davis Polk & Wardwell LLP is acting as legal advisor to Equinix. Piper Jaffray & Co., Deutsche Bank Securities, Inc. and RBC Capital Markets are acting as financial advisors, while Holland & Knight LLP is acting as legal advisor to Switch & Data. Raymond James & Associates, Inc. provided a fairness opinion to Switch and Data's Board of Directors with respect to the transaction.
The transaction is targeted to be completed in the first quarter of 2010.
Deal Value (US$ Million) 689 Deal Type Acquisition Sub-Category Majority Acquisition Deal Status Announced: 2009-10-21
Deal Participants
Target (Company) Switch & Data Facilities Company, Inc. Acquirer (Company) Equinix, Inc.
Deal Rationale
The combination of the two companies will further strengthen Equinix's leadership position in the global data center services market by extending its presence to 16 new markets across North America. The acquisition will add more than one million gross square feet of data center capacity, bringing Equinix's total global footprint to 79 data centers in 34 markets and more than six million square feet across the North American, European and Asia-Pacific markets. The transaction will allow Equinix to immediately expand into new strategic markets, including Atlanta, Denver, Miami, Seattle and Toronto, as well as provide a platform for future expansion of Switch & Data assets. The transaction is expected to give Equinix customers broader access to local markets for their network edge deployments, and Switch & Data customers a comprehensive solution to their global data center needs. The customers of both the companies will benefit from a stronger product portfolio and capacity pipeline in a market where demand continues to outpace supply and from doing business with a partner that brings together the capabilities of two companies.
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