Summary
Equinix, Inc. (EQIX) announced a significant development with the signing of an Agreement and Plan of Merger with Switch & Data Facilities Company, Inc. (Switch and Data) on October 21, 2009. This transaction, structured as a merger where Equinix's subsidiary Sundance Acquisition Corporation will merge with Switch and Data, aims to expand Equinix's footprint and service offerings in the data center space. The merger consideration for Switch and Data shareholders will be a mix of Equinix common stock and cash, with a fixed exchange ratio of 0.19409 Equinix shares per Switch and Data share or $19.06 in cash per share, subject to proration to maintain an overall 80% stock / 20% cash composition for the total deal consideration. The company emphasizes that the merger is designed to qualify as a tax-free exchange for Switch and Data shareholders concerning the stock portion of the consideration. The deal is subject to customary closing conditions, including regulatory approvals (like Hart-Scott-Rodino), the effectiveness of Equinix's registration statement for the new shares, and Switch and Data shareholder approval. A voting agreement has also been executed with Switch and Data's key insiders and stockholders, committing them to vote a significant portion of Switch and Data's shares in favor of the merger, indicating strong support from management and major shareholders.
Key Highlights
- 1Equinix, Inc. has entered into a merger agreement to acquire Switch & Data Facilities Company, Inc.
- 2The acquisition consideration will be a mix of Equinix common stock and cash, with an 80% stock/20% cash allocation for the overall transaction.
- 3Switch and Data shareholders can elect to receive 0.19409 shares of Equinix common stock or $19.06 in cash per share, with potential proration.
- 4The merger is structured to be a tax-free reorganization for the stock portion of the consideration received by Switch and Data shareholders.
- 5Key conditions for closing include regulatory approvals, Switch and Data shareholder approval, and the effectiveness of Equinix's S-4 registration statement.
- 6A voting agreement is in place, securing votes from Switch and Data's directors, executive officers, and significant stockholders representing 35% of outstanding shares.