Equinix talks for the first time after its $260m Itconic acquisition
Eric Schwartz, Equinix’s EMEA president, speaks to Data Economy from Madrid on what the acquisition means to both companies and the market.
Equinix (Nasdaq: EQIX) shows no signs of slowing down in investing in its fleet of data centres which nears now almost 200 facilities in more than 45 markets.
The company has now entered two completely new markets – Portugal and Spain – through a $259m acquisition of Itconic, the Iberian operator with five data centres, one in Lisbon, two in Madrid, one in Barcelona and one in Seville.
In total, it is more than 320,000 sqf that will be added to the Equinix portfolio which has over the years amounted to a total capital expenditure of more than $17bn.
Building on the new assets in the Iberian Peninsula, Data Economy sat down with Eric Schwartz (ES), Equinix’s EMEA president, in Madrid to get the first industry view of what the Itconic acquisition means to both companies and the market.
How has this acquisition come about?
ES: Equinix has a pretty disciplined process about assessing opportunities in new markets that we are constantly surveying our customers about which markets that we are not present hold appeal. Madrid and Lisbon in particular, but also Barcelona, showed an interest in the surveys.
We saw this as an opportunity and we were able to engage with the company [Itconic] and obviously The Carlyle Group’s involvement as private equity sponsor.
This has led to the transaction that we are at now and for us this is very consistent with our strategy for expansion into new markets in very much the same way as the TeleCity transaction to bring us to a new marketplace.
How fast was the discussion surrounding this acquisition?
ES: The deal came together relatively quickly and we had a change to understand the business.
I am sure we have engaged with the team and once it closes we are going to find a lot more opportunities beyond what it is pretty apparent.
Did you look into other local providers, or taking into account this specific pan-Iberian portfolio, was Itconic an easy choice?
ES: There is activity all the time. This one particularly, the company, the culture, the assets position is clearly the ideal fit for our strategy.
This acquisition provides much more than just hosting space in Portugal and Spain. With the presence of submarine cables into both North Africa and Latin America, how is Equinix going to make use of these?
ES: We are keenly aware of the [submarine] cables on multiple sites for Itconic. We are going to – in the same way that we have invested quite a lot of energy adding cable landings in places like Helsinki and Stockholm – we are going to do the same here.
It is an attractive position for us that the cables going in between Brazil and Portugal that we have a presence on both sides to serve customers there.
The connection to North Africa is something where we have had some engagement and involvement, but this will obviously be an opportunity to increase that substantially.
Are there any plans to expand the infrastructure in Portugal and/or Spain?
ES: We do not have specific plans right now but this will be customer driven.
We have accessed every facility that we are acquiring in terms of expansion potential and we think that we will be well positioned to meet customer demand for growth in all of the markets that we are now entering.
We are going to be in a position to invest in the Portuguese market just as we do in our markets around the world in the extent that is a key criteria to our customers that there is not only a quality facility that will support their business place, but also an operator who is capable of expanding and growing with their business.
What is the customers landscape as of the acquisition?
ES: There is definitely some overlap, where customers are customers of Equinix and Itconic and we will bring that together and be in a better position to serve them.
What will be Itconic’s CEO Faustino Jiménez role going forward?
ES: He continues as the MD and CEO of the company. Once we close the deal, we will get deeper into the integration plan and look into how to bring the brands together and all that.
The plan is for him to continue as the leader of the business in Iberia.
What about the 250 employees working for Itconic?
ES: The team at Itconic has done very well in building the business. The company has a lot of interesting capabilities in the number of people that are certified by the various cloud providers.
Having cloud expertise, whether it is AWS, Azure, Google, etc, we needed a focus on the assets but we are also picking up a lot of good people who are going to help us build the business not only here in Iberia but across Europe and around the World.
What is next for Equinix?
ES: We are going to close on this acquisition and make sure it is successful. The methodology is very much the same.
We are continuing to engage with customers about markets where they have needs and would like us to serve them and we take that on the demand side and then we match that with where we see we have opportunities to build a high quality facility that will meet those requirements and when those come together, we proceed.
There is plenty of growth, plenty of work for us to do in our existing 13 countries and now adding these two. This is going to continue to be the focus.
There is no ‘next’ per say, but there is definitely growing demand in pretty much every sector. We are going to continue to position ourselves to better serve them.