The Equinix and Telecity Deal: Global Data Domination Starts in Europe

One of the largest American data center operators Equinix Inc. has acquired Telcity Group PLC, a fellow data center operator based in the UK. The deal was finalized last Friday with Equinix striking a deal at $3.6 billion in both cash and stocks. The acquisition follows a stumped deal between Telecity and European Interxion Holding in what was hoped to become the European rival of Equinix.

But it seems that Equinix is succeeding in bringing their business to a global level with the deal. As the two companies merge, it means bigger and meaner competition for Interxion and the European market.

Equinix will pay approximately $17.55 per share and another 34.9 premium to the closing price of Telecity's Feb 10 closing price. This puts Telecity's value at £2.33 billion. This investment, according to Equinix president and chief executive Stephen M. Smith, will strengthen the company's offers in the European front, as well as its goal of becoming a global leader in data operations.

The said deal came at the right time as demands for data centers in Europe has been rising as more computer and telecom equipment powered by the internet are demanding for bigger data space. This is not only due to internet usage on PCs and laptops, but also on data being accessed on mobile phones as well as that of the cloud services.

As more people avails of cloud computing and accesses the internet through their mobile phones, networking-hardware specialist Cisco Systems Inc. predicts that there will be a boom in global internet traffic in the next five years, going as much as triple than the current traffic. This means good business in the coming years for data centers, and the merger with Telecity might just be the best move for Equinix.