Equinix expands international footprint

Equinix has expanded its Asia Pacific footprint through a series of transactions this week that would make a multi-player, multi-team baseball trade seem simple by comparison.

Equinix integrated the assets of Singapore Technologies Telemedia’s [STT] wholly owned i-STT subsidiary and Pihana Pacific into its core Internet exchange services business. Additionally, STT has made a $30 million investment into Equinix--for which it received 28% ownership of the company, which will continue to operate under the Equinix brand. Equinix will use $23 million of the cash plus an equity offering to retire $130 million in debt, or about 80% of the company’s senior bonds,

When completed, the deal will take Equinix from seven U.S.-based network hubs to 14 throughout the U.S. and Asia and expand its presence from 800,000 square feet to almost 1.1 million square feet of neutral hosting space, said Margie Backhaus, the company’s chief marketing officer.

While Backhaus admitted that Equinix would probably put the money into expanding its Asian presence, the complex transaction brought “significant expansion from a footprint perspective without capital expenditures from any of the three companies.”

It started, she said, with Pihana and i-STT, which “have very strong footholds in terms of who their customer basis is” and continued into the relationships the merged entities will have.

“We hope to bring the relationships we have with our customers--the systems integrators and the big networks--over to Asia and they’re going to do the same. We really want to be able to expand internationally without additional capital expenditures.”

STT’s cash infusion was “very important to us to help us fix our balance sheet. Our customers going forward have no question about whether we’re going to be here for the long-term financially. They’ve taken the financial question completely out of the question by allowing us to retire this debt.”