Equinix To Buy Switch & Data For $689 Million In Cash And Stock

Equinix (EQIX) this afternoon said it agreed to buy Switch & Data Facilities Co. (SDXC) for $689 million in cash and stock. Equinix said the deal with strengthen its position in the data center services market, adding 16 new markets across North America. The deal will add 34 data centers in 22 markets in U.S, and Canada, with more than 1 million gross feet of added data center capacity.

The companies expect to complete the deal in Q1 2010; it is subject to various regulatory approvals as well as approval of SXDC holders. The deal is expected to qualify as a tax-free exchange with respect to the stock portion of the transaction.

Terms call for SXDC holders to choose to receive either 0.19409 shares of EQIX common stock or $19.06 in cash for each Switch & Data share. The overall consideration will be 80% in EQIX common and 20% in cash; if more holders elect to receive cash, the payout will be pro-rated to reach the 80/20 intended proportion.

Meanwhile, Equnix this afternoon also posted Q3 revenue of $227.6 million, above the Street at $224.1 million, with diluted EPS of 47 cents, ahead of the consensus at 30 cents.

The company said it now sees 2009 revenue of $875 million to $880 million, which is above the Street at $872 million.

In late trading, EQIX is down $5.62, or 5.8%, to $92.13; SDXC is up $3.60, or 25%, to $18.