29 May

Equinix Data Centres to buy smaller UK rival Telecity in £2.35 billion deal

Telecity, the UK firm that runs high-speed data centres for Spotify and Facebook, has been bought by an American rival for £2.35bn.

Equinix announced the merger, which values Telecity at £11.45 per share, in a company statement on Friday morning. The deal represents a premium 34.9pc on Telecity’s share price from February 10.

Founded in 1998, Equinix operates more than 100 data centers in 33 markets in five continents.

It previously said that buying Telecity would give it more locations in Britain, including central London. The deal will also expand its footprint in cities such as Dublin, Milan, Istanbul, Stockholm, Helsinki and Warsaw.

The acquisition comes three months after after Telecity unveiled plans to merge with its Dutch rival Interxion, which is listed on the New York Stock Exchange.

Equinix chief executive Stephen Smith said it was an “exciting day” for both companies.

“The addition of TelecityGroup’s businesses will considerably strengthen Equinix’s offering to customers in Europe and beyond, reinforcing us as a global leader in global interconnection and data centres,” said Mr Smith.

The US firm also announced that Telecity’s chairman John Hughes would join the board of Equinix when the deal was completed. Telecity is without a permanent chief executive following Michael Tobin’s abrupt resignation in October after 10 years in charge.

“The board of Equinix believes that the transaction will deliver significant value for the shareholders of both TelecityGroup and Equinix,” said a company statement.

Telecity’s Mr Hughes said: “Having carefully considered all our options, the board believes this is a compelling offer and an excellent outcome for shareholders, employees and customers.”

“This is testament to the hard work of all TelecityGroup’s employees.”