Equinix seals $800m Infomart buy and eyes Latam opportunities

04 April 2018 | James Pearce

Equinix has completed its $800 million acquisition of the Infomart Dallas facility from ASB Real Estate Investments.

Equinix Infomart DallasThe deal - first signed on 11 February - adds 1.6 million gross square-foot of space to Equinix’s portfolio. This includes multiple diverse fibre entry points and more than 50 tenants, including networks, colocation providers and enterprises.

The Infomart is one of the largest interconnection hubs in the US and already houses four of Equinix’s International Business Exchange data centres. It generated around $50 million of revenues in 2017, of which $20 million was attributed to rent and maintenance recoveries from Equinix itself, highlighting the potential savings offered by the acquisition.

Equinix said the purchase would help strengthen its global platform whilst also offering the opportunity to expand in the Dallas market by building on existing underdeveloped capacity along with land adjacent to the existing building.

Karl Strohmeyer, president, Americas, Equinix said: "The Dallas metro region has long been a major internet and network peering exchange point and is a major communications hub for the southern United States. The addition of the Infomart to the Equinix portfolio supports our ongoing global expansion while further enabling the US digital economy."

The existing build combined supports approximately 3,500 built out cabinets and house more than 100 network service providers—more than any other data centre provider in the Dallas metro area. Equinix built its first Dallas data centre in 2000 and has seen significant growth in the area.

Research from 451 Research, released in 2017, forecast an 11% compound annual growth rate for data centre capacity added to the Dallas market from 2013 through to 2019 driven by demand from enterprises.

Stefanie Williams, associate analyst, multi-tenant data centres at 451 Research, said: "Equinix fortifies and expands its market positon with the acquisition of the Infomart Dallas. This strategic move positions the colocation and interconnection leader as the single largest data centre provider in one of the largest enterprise and colocation markets in the Americas.

“With its existing service offerings and market innovations, Equinix continues to enable its customers to extend their reach, and drive digital platforms that disrupt multi-cloud business models. The acquisition validates the company's strategy and ongoing investments based on strong demand, which is expected to continue."

The Dallas facility also offers Equinix significant growth opportunities in the Latin American region through key terrestrial routes serving both Central and South America.

A 2017 Interconnection Index published by Equinix predicted that Latam will be the fastest-growing region in terms of interconnection bandwidth through to 2020, highlighting the opportunity Dallas offers Equinix.

In recent blog Bill Long – VP of interconnection product management at Equinix – explained some of the logic behind the acquisition, identifying Latin America as a key driver behind the bid.

Long wrote: “Dallas is historically a major gateway to Latin America, serving Mexico as well as Central and South America. The Infomart acquisition combines with our existing operations in Bogotá, Los Angeles, Miami, Rio de Janeiro and São Paolo to give us a more robust Latin American footprint of network and content providers looking to grow in the region. It bolsters business opportunities for managed services and cloud services providers, which have high usage rates by Latin American enterprises. And it increases access to important Latin American financial ecosystems, including those built around the Brazilian and Mexican stock exchanges. 

“The Infomart purchase is also well-aligned with our 2017 acquisition of the Miami NAP of the Americas (NOTA) facility. NOTA is the fourth-largest internet exchange point in the U.S. and a major hub for traffic between the U.S. and major Latin America markets via subsea cable. As businesses transform into digital businesses, the NOTA and Infomart facilities will combine to offer them new possibilities for interconnection and collaboration.”

The April/May issue of Capacity, which will feature at this year's ITW in Chicago, will include a Special Report on data centres. To get involved, contact Deputy Editor James Pearce on james.pearce@capacitymedia.com