Foster City, California – (The Hosting News) – September 14, 2005 – Equinix, Inc., a leading provider of network-neutral data centers and Internet exchange services, has announced an agreement to acquire a new data center in the Los Angeles area as the company continues to expand its data center operations in response to strong customer growth.Ã‚Â
Equinix will discuss the purchase of the new data center, the company’s future expansion plans to lease, buy or build data center properties, and organizational changes to support its expansion plans on an investor conference call scheduled for Wednesday, September 14, 2005, at 8:30 a.m. ET.
The new center will be acquired through a purchase, where Equinix will own the land, the building and the data center assets. The center, located in El Segundo, will become Equinix’s third IBX center in the Los Angeles area, and follows expansions announced by Equinix earlier this year in the Silicon Valley and Chicago markets.
It will provide Equinix with additional data center space to respond to strong customer demand in the Los Angeles market, particularly among the large aggregation of rapidly growing digital media companies in the region.
Originally built for Exodus Communications in 2001 at a cost of approximately $80 million, the 107,000 square foot stand-alone center was purchased for $34.5 million. Equinix conducted a rigorous review of all data center properties on the market in the Los Angeles area and identified this property to be the only center available to meet Equinix’s high standards. The center, with its advanced power infrastructure, will add approximately 2,000 cabinets and will double Equinix’s Los Angeles area footprint to more than 200,000 square feet. Equinix intends to open the new center for customers in the first half of 2006.
The center will be interconnected to Equinix’s downtown Los Angeles IBX centers through redundant dark fiber links managed by Equinix. This interconnection fabric will enable occupants in each center to have direct access to each other as if they were in the same location, and it will provide immediate access to the more than 85 networks currently operating within Equinix’s L.A. IBX. The new center will also feature a physical infrastructure that is consistent with Equinix’s industry-leading standards for high-performance, security, environmental control and power availability.
Equinix also announced that the company is considering future expansion plans to lease, buy or build data center properties in targeted large metropolitan markets as warranted by customer demand. To further advance this initiative Chief Financial Officer Renee Lanam will manage Equinix’s expansion efforts under the title of Chief Development Officer. Keith Taylor, Vice President, Finance and Chief Accounting Officer of Equinix, will be named CFO.
Peter Van Camp, CEO of Equinix commented on the data center acquisition, ”With three data center acquisitions since the beginning of 2005, Equinix is responding to the strong customer growth that is solidifying our leadership position in the colocation and exchange services market and paving the way to meeting our goal of building a $500 million dollar company. As our expansion plans are critical to the growth of the company, Equinix has committed a seasoned veteran of the Equinix senior management team, Renee Lanam, to oversee these efforts. I have the utmost confidence in Renee’s leadership in this new role, and I am excited that Keith Taylor, who also has a depth of knowledge and financial experience from a long tenure at Equinix, will serve as the company’s CFO.”
”As customer demand drives new expansions, the current market environment gives us a significant amount of flexibility to lease, purchase or build attractive data center properties,” said Renee Lanam, Chief Development Officer of Equinix. ”We plan to explore new builds through build-out partnerships or other financing strategies to reduce the outlay of cash and maximize shareholder returns.”
Equinix intends to invest approximately $15.0 million of capital expenditures to upgrade the center to Equinix standards, of which $2.0 to $3.0 million is expected to be incurred in 2005, increasing 2005 expansion capex guidance to a range of $25.0 to $30.0 million and total capex to a range of $42.0 to $48.0 million.Ã‚Â The company intends to explore sale-leaseback opportunities before year-end to minimize the cash outlay related to the purchase of the center.Ã‚Â Ã‚Â With this goal, current 2005 guidance on Free Cash Flow of greater than $30.0 Million remains unchanged.
Revenue and EBITDA guidance for the year also remain unchanged.
Equinix will hold an investor conference call to discuss the new Los Angeles area data center purchase, the company’s expansion strategy and organizational changes on Wednesday, September 14, 2005, at 8:30 a.m. ET (5:30 a.m. PT).Ã‚Â To join the conference call, please dial 1-773-799-3263 and reference the passcode (EQIX).Ã‚Â A simultaneous live Webcast of the call will be available over the Internet at www.equinix.com, under the Investor Relations heading.