Equinix to acquire TelecityGroup

The Transaction represents a value of approximately 1,145.0 pence per TelecityGroup Share and a value of approximately £2,351.9 million for TelecityGroup’s entire issued and to be issued share capital based on the volume-weighted average share price of $267.74 per Equinix Share for the 5 day period to 28 May 2015 (being the last Business Day before the date of this Announcement) and an exchange rate on 28 May 2015 of 1.5283. 

Based on the value of approximately 1,145.0 pence per TelecityGroup Share, the terms of the Transaction represent:
- a premium of approximately 34.9 per cent. to the Closing Price of 848.5 pence per TelecityGroup Share on 10 February 2015 (being the last Business Day before TelecityGroup announced its proposed merger with Interxion);
- a premium of approximately 56.5 per cent. to the volume-weighted average share price of 731.8 pence per TelecityGroup Share for the 12-month period to 10 February 2015 (being the last Business Day before TelecityGroup announced its proposed merger with Interxion); and
- a premium of approximately 27.3 per cent. to the Closing Price of 899.5 pence per TelecityGroup Share on 6 May 2015 (being the last Business Day before TelecityGroup announced that it was in discussions with Equinix).

The current value of the Transaction at Equinix’s Closing Price of $269.19 on 28 May 2015 (being the last Business Day before the date of this Announcement) and an exchange rate on 28 May 2015 of 1.5283 is 1,148.5 pence per TelecityGroup Share and implies a premium of approximately 27.7 per cent. to TelecityGroup’s Closing Price of 899.5 pence per TelecityGroup Share on 6 May 2015.

Following completion of the Transaction, TelecityGroup Shareholders will hold approximately 10.1 per cent. of the Combined Group.

Equinix has agreed that John Hughes, Executive Chairman of the Board of TelecityGroup, will join the Board of Equinix on completion of the Transaction.

The directors of TelecityGroup, who have been so advised by Goldman Sachs International and Oakley Capital Limited as to the financial terms of the Transaction, consider the terms of the Transaction to be fair and reasonable. In providing their advice Goldman Sachs International and Oakley Capital Limited have taken into account the commercial assessments of the directors of TelecityGroup.

Accordingly, the directors of TelecityGroup intend unanimously to recommend that TelecityGroup Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Transaction at the TelecityGroup General Meeting, as the directors of TelecityGroup have irrevocably undertaken to do in respect of their own beneficial holdings of 128,318 TelecityGroup Shares in aggregate representing approximately 0.0632 per cent. of TelecityGroup’s issued share capital on 28 May 2015 (being the last Business Day before this Announcement).

The Board of Equinix believes that the Transaction will deliver significant value for the shareholders of both TelecityGroup and Equinix. The Board of Equinix believes that the premium offered, which includes a significant cash component and the opportunity for TelecityGroup Shareholders to participate in combined value creation through the Transaction's equity component, represents a highly attractive opportunity for TelecityGroup Shareholders.

The Board of Equinix believes that this Transaction will provide the opportunity for increased network and cloud density to better serve customers. The combined footprint of Equinix and TelecityGroup will create a stronger platform to attract customers and pursue the emerging enterprise opportunity. Equinix expects the Transaction to enable accelerated deployment of cloud service provider nodes and to further the execution of Equinix’s cloud ecosystem strategy for EMEA.

Equinix will provide a Mix and Match Facility, which will allow TelecityGroup Shareholders to elect, subject to off-setting elections, to vary the proportions in which they receive New Equinix Shares and cash. The Mix and Match Facility will not change the total number of New Equinix Shares to be issued or the maximum amount of cash that will be paid under the terms of the Transaction.

Commenting o the acquisition announcementt, Stephen Smith, Chief Executive Officer & President of Equinix said:  “We are delighted to announce the combination of TelecityGroup and Equinix in what is an exciting day for the stakeholders of 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, as well as bringing the benefits of greater cloud and network density to our customers.

"The transaction will allow Equinix to benefit from increased scale and extend the global reach of our platform. We believe our offer is compelling to TelecityGroup Shareholders who will realise significant value for their holdings while having the opportunity to participate in the future strengths of the combined business. We are especially pleased to be welcoming John Hughes onto the Board of the combined business and will greatly benefit from his experience in the technology space. ”

John Hughes, Executive Chairman of TelecityGroup, added:  “On behalf of the Board of TelecityGroup, I am very pleased to recommend the combination of TelecityGroup and Equinix to our shareholders today. Having carefully considered all our options, the Board believes this is a compelling offer and an excellent outcome for shareholders, employees and customers.

"TelecityGroup has become a leading player in the European datacentre industry, consistently delivering an outstanding performance and high quality returns to shareholders. This is testament to the hard work of all TelecityGroup’s employees. I am delighted that they now have the opportunity to be part of a global technology leader, led by Equinix’s exceptional management team.

"Through this transaction, our customers will have new global opportunities for their connected datacentre requirements. The combination of Equinix and TelecityGroup services and people will ensure the expanded business leads the way in the provision of highly-connected data centre services for customers in Europe and all over the world.”