Equinix moves into Europe by slurping up Telecity

Data centre outfit Equinix is enlarging its presence in Europe by gobbling up UK-based Telecity for £2.3bn, with the deal adding a further 39 European data centres to the US-based company's existing empire of 100.

Equinix chief executive Stephen Smith said the announcement was an "exciting day for the stakeholders of both companies".

He added: "The addition of TelecityGroup's businesses will considerably strengthen Equinix's offering to customers in Europe and beyond."

John Hughes, executive chairman of TelecityGroup, will join the Equinix board.

The deal has put the kibosh on Telecity’s proposed merger with Netherlands-headquartered Interxion.

Earlier this year, the duo had made a non-binding agreement to make a corporate beast with one back and create a £600m-plus sales European heavyweight.

Kate Hanaghan, analyst at TechMarketView, said Equinix moved in to make an offer after Telecity announced its interest in Interxion in February. "US-based Equinix didn’t want to lose its chance to expand into Europe and in early May stepped in with a possible offer for Telecity of £11.45 per share," she said.

"We are not surprised there have been a few twists and turns in this tale. Scale, in terms of facilities, capabilities and geographical coverage, is of course paramount for data centre providers, and serious opportunities to improve that must not be overlooked."

In 2014, Telecity reported a revenue increase of 7.1 per cent to £348.7m for the year. However, according to its Companies House filing, profit for the year slipped from £65.2m to £59.7m.

Equinix reported an increase in revenue of 14 per cent to $2.4bn (£1.6bn) last year. For the full year of 2015, it expects sales to reach more than $2.6bn (£1.7bn). ®