Equinix completes $3.6 billion deal to buy 29 data centers from Verizon

Equinix, an international data center company based in Redwood City, California, announced today that it has completed the purchase of 29 data centers from Verizon for $3.6 billion. The deal was announced in December.

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The acquisition greatly expands Equinix’s footprint, including giving it access to Latin America through a data center in Bogotá, Colombia, along with a new presence in Houston, Texas and Culpeper, Virginia. The jewel in the acquisition, however, might be the new Miami location, because it acts as a key internet connection point.

“As the fourth largest Internet exchange point in the U.S., [the Miami location] hosts the termination points of 15 subsea cable systems and more than 120 global networks interconnecting to approximately 150 countries,” the company wrote in a statement.

Equinix was also especially interested in the Culpeper facility, which it called “one of the most secure and technologically sophisticated data center campuses in the eastern U.S.” Taking ownership of Culpeper should allow the company to grow its government business.

With this purchase, Equinix now owns a total of 179 data centers worldwide.

It’s worth noting that these data centers are co-location facilities, which are essentially data center rental facilities where companies bring their own servers, storage and other hardware and rent space inside someone else’s facilities. The vendor takes care of all the maintenance and management of the overall facility, including access to the internet, power, cooling, security and so forth.

Equinix didn’t just buy the facilities themselves, it also got 250 of Verizon’s employees in the deal, who become Equinix employees today and will continue to run the buildings. They also get 1,000 Verizon customers who are using the data centers, of which 600 are new to Equinix.

Verizon isn’t just cutting and running after the sale. Equinix reports it will continue to be a customer and partner selling Equinix co-location services, even after the deal closes. The idea is to pair Equinix’s services with Verizon’s security, network and advanced communications services.

Verizon doesn’t have to worry about maintaining the facilities, collects a substantial cash payment and still can continue to sell those services to customers. Equinix gets to own the facilities and gets access to new markets and new customers, as well as taking advantage of Verizon’s sales and marketing clout.

Why buy 29 more data centers? Increasingly, companies want to move the data closer to the customer to reduce latency, Steve Smith, CEO, Equinix explained in a statement.

“[Customers] are moving from traditional centralized infrastructure to a distributed model that keeps data closer to the customers, partners and employees using it,” Smith said.

Essentially, companies don’t want all of their data in a centralized location. They want to distribute it over multiple locations and Equinix wants to help them do it.

Verizon is not the first telco to exit this business. At the end of last year, CenturyLink dumped its co-location data center business in a $2.2 billion deal that involved 57 data centers.