Summary
Equinix Inc. (EQIX) announced a significant expansion into the Brazilian market through the acquisition of approximately 90% of ALOG Data Centers do Brasil S.A. ("ALOG") via a joint venture. This strategic move, involving a partnership with Riverwood Capital L.P., underscores Equinix's commitment to global growth and its strategy of acquiring established players in key international markets. The transaction is valued at approximately 211 million Brazilian reais, or $127 million, with the remaining 10% of ALOG to be acquired by the joint venture through an exchange with ALOG's management shareholders for equity in the joint venture itself.
Key Highlights
- 1Equinix, through a joint venture with Riverwood Capital, is acquiring a controlling stake (approximately 90%) in ALOG Data Centers do Brasil S.A.
- 2The acquisition represents a strategic expansion into the Brazilian data center market.
- 3The total purchase price for the stake in ALOG is approximately $127 million (211 million Brazilian reais), subject to balance sheet adjustments.
- 4The remaining 10% of ALOG will be acquired by the joint venture in exchange for equity in the joint venture, involving ALOG's management shareholders.
- 5Equinix will hold a controlling interest in the joint venture, with Riverwood holding a significant minority stake.
- 6The agreement includes provisions for future buy/sell options between Equinix and Riverwood for their respective stakes in ALOG, starting in April 2014.
- 7The transaction is subject to customary closing conditions and has a termination date of May 10, 2011, if not closed by then.
Frequently Asked Questions
This 8-K filing announces Equinix's entry into a material definitive agreement to acquire a controlling stake in ALOG Data Centers do Brasil S.A., marking a significant international expansion.
Equinix is partnering with Riverwood Capital L.P. through a joint venture vehicle named Zion RJ Participações S.A. to complete this acquisition.
The joint venture will pay approximately $127 million (211 million Brazilian reais) in cash for approximately 90% of ALOG's capital stock. The price is subject to certain balance sheet adjustments, and a portion of the purchase price will be withheld for potential indemnification claims.
The agreement specifies that the closing must occur on or before May 10, 2011, or either party may terminate the agreement. The filing does not specify an exact closing date but indicates conditions need to be satisfied.