Verizon Selling Data Centers to Equinix for $3.6 Billion Amid Continuing Move to Cloud

Verizon agreed to sell 24 data center sites to Equinix for $3.6 billion in cash, including 29 buildings in 15 metropolitan areas, the companies said (here and here) Tuesday. That will increase interconnection in the U.S. and Latin America, the buyer said. "It enables us to enhance cloud and network density to continue to attract enterprises, while expanding our presence in the Americas," said Equinix CEO Steve Smith. Some 250 Verizon employees will work for the acquirer, Equinix said, and both companies said the deal is expected to be complete by mid-2017. "There could be some integration challenges on the non-Terremark facilities, which we understand had lower growth, utilization and capital investment than other parts of the portfolio," Wells Fargo analyst Jennifer Fritzsche wrote investors. Verizon bought Terremark in 2011 for about $1.4 billion (see reports in 2011's April 4 and Jan. 31 issues). "The network-neutral data center space represents a derivative play on the continued growth of IP and Internet traffic," the analyst wrote.