October 6, 2005
Equinix to purchase its flagship Washington DC area data centre campus; Company ahead of schedule on closing sale-and-leaseback of new Los Angeles Area centre
Foster City, CA — October 6, 2005 — Equinix, Inc. (Nasdaq: EQIX), the leading provider of network-neutral data centers and Internet exchange services, today announced an agreement to acquire its flagship Washington, D.C. area data center campus in Ashburn, Virginia for $53.0 million. The company also announced that it expects to close the sale- leaseback of its newly- acquired Los Angeles area data center within 30 days, ahead of its previously announced target of year-end.
Equinix's flagship Internet Business Exchange™ (IBX®) center in Ashburn is part of a 32.6 acre campus that totals 461,700 square feet located in the Dulles Corridor that is home to many of the region's technology companies. Equinix currently occupies three of the six buildings on the campus, including two fully built-out IBXs and a third available for expansion. The total campus is 95% leased. Equinix intends to sell those buildings that will not be used for expansion, and the company will evaluate opportunities to secure long-term financing on the retained buildings, either in the form of sale-leaseback or mortgage financing, by year-end. Equinix also leases a fourth building on a nearby campus that was opened as a part of the company's Washington, D.C. area expansion in December 2004.
Equinix also announced that it is ahead of schedule in the closing of the sale-leaseback of its Los Angeles area center in El Segundo. The Company originally purchased the property for $34.5 million in September of this year and is currently in negotiations with multiple parties to sell the center for $36.0 - $40.0 million. Equinix expects to close the transaction within 30 days..
"With the announced sale of the Ashburn campus, we saw an opportunity to secure our flagship IBX center as well as to acquire contiguous expansion space to position ourselves for further growth in one of our strongest markets," said Peter Van Camp, CEO of Equinix. "Given the tremendous interest we have received in the planned sale-leaseback of our recently acquired Los Angeles area center, we are confident there is a great opportunity to obtain attractive long-term financing for this strategic Washington, D.C. area property as well."
The purchase of the Ashburn, Virginia campus is not expected to have a negative impact on the Company's previously issued guidance on quarter and year-end revenue and EBITDA. Absent this transaction, Free Cash Flow guidance for the year would also not be negatively impacted. Depending on the nature of the financing used for this property, the company will update Free Cash Flow guidance on Equinix's third quarter earnings conference call.
Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of IXEurope into Equinix; a failure to receive significant revenue from customers in recently built out data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; the results of any litigation relating to past stock option grants and practices; and other risks described from time to time in Equinix's filings with the Securities and Exchange Commission. In particular, see Equinix's recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.
Equinix and IBX are registered trademarks of Equinix, Inc. Internet Business Exchange is a trademark of Equinix, Inc.