EQUINIX, INC. (NASDAQ:EQIX) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement |
Transaction Agreement
On December 6, 2016, Equinix, Inc. (Equinix) entered into a
transaction agreement (the Transaction Agreement) with Verizon
Communications Inc. (Verizon), to which Equinix agreed, subject
to the terms and conditions set forth in the Transaction
Agreement, to acquire Verizons colocation services business (the
Business) at 24 data center sites, consisting of 29 data center
buildings, located in the United States, Brazil and Colombia (the
Acquired Data Centers) for a cash purchase price of $3.6 billion,
subject to certain adjustments described in the Transaction
Agreement (the Transaction). Equinix expects to fund the
Transaction with a combination of cash on hand and the proceeds
of debt and equity financings.
The Transaction will be effected by the acquisition by Equinix of
all of the equity interests of wholly-owned subsidiaries of
Verizon that, immediately prior to the closing of the
Transaction, will hold certain assets and be liable for certain
liabilities relating to the Business. As part of the Transaction,
Equinix will also acquire fee or leasehold real estate interests
at the Acquired Data Centers. At the closing of the Transaction,
Verizon and Equinix will enter into colocation and lease
agreements to which Equinix will provide colocation services to
Verizon at the Acquired Data Centers and will lease or sublease
certain portions of the Acquired Data Centers to Verizon. Verizon
will continue to operate businesses other than the Business at
the Acquired Data Centers after the closing. The Transaction is
expected to close by mid-2017.
The Transaction Agreement contains representations, warranties,
and covenants of the parties that are customary for transactions
of this type. Until the closing of the Transaction, Verizon has
agreed, subject to certain exceptions, to, and to cause its
subsidiaries to, conduct the Business in the ordinary course
consistent with past practice. Both Verizon and Equinix have
agreed, following the closing of the Transaction, to indemnify
the other party for losses arising from certain breaches of the
Transaction Agreement and for certain other liabilities, subject
to certain limitations.
The completion of the Transaction is subject to closing
conditions, including (i)the absence of any injunction, law or
order that makes unlawful the consummation of the Transaction,
(ii)the material accuracy of the representations and warranties
of, and the material compliance with covenants by, the other
party and (iii)the delivery of required closing documents.
Equinixs obligation to consummate the Transaction is also
conditioned on, among others, (i)the absence of any pending or
threatened proceeding brought by a governmental authority to
applicable antitrust laws that seeks to enjoin or preclude the
closing of the Transaction or seeks to impose certain
restrictions on Equinix or the Business and (ii)no material
adverse effect having occurred with respect to the Business.
There is no financing condition to the Transaction.
The Transaction Agreement provides Equinix and Verizon with
certain termination rights, including if the Transaction does not
close by September 6, 2017 (the End Date), provided that the End
Date may be extended to December 6, 2017 in certain
circumstances. Additionally, either party may terminate the
Transaction Agreement upon a breach by the other party of any
representation, warranty or covenant made by such breaching party
in the Transaction Agreement, such that the applicable condition
to closing is not satisfied and such breach is not cured by the
earlier of 30 days after written notice or the End Date. The
Transaction Agreement also provides that upon termination of the
Transaction Agreement under specified antitrust-related
circumstances, Equinix will pay to Verizon a termination fee of
up to $200.0 million.
The foregoing summary of the Transaction Agreement and the
Transaction contemplated thereby does not purport to be complete
and is qualified in its entirety by reference to the terms and
conditions of the Transaction Agreement, a copy of which is
attached hereto as Exhibit 2.1 and incorporated herein by
reference.
The representations and warranties and covenants set forth in the
Transaction Agreement have been made only for the purposes of the
Transaction Agreement and solely for the benefit of the parties
to the Transaction Agreement, may be subject to limitations
agreed upon by the contracting parties, including being qualified
by confidential disclosures made for the purpose of allocating
contractual risk between the parties to the Transaction Agreement
instead of establishing these matters as facts, and may be
subject to standards of materiality applicable to the contracting
parties that differ from those applicable to investors. In
addition, such representations and warranties were made only as
of the dates specified in the Transaction Agreement. Accordingly,
the Transaction Agreement is included in this filing only to
provide investors with information regarding the terms of the
Transaction Agreement and not to provide investors with any other
factual information regarding the parties or their respective
businesses.
Debt Financing
In connection with the execution of the Transaction Agreement,
Equinix has entered into a commitment letter (the Commitment
Letter), dated December 6, 2016, with JPMorgan Chase Bank, N.A.,
Bank of America, N.A. and Merrill Lynch, Pierce, Fenner Smith
Incorporated (the Commitment Parties), to which the Commitment
Parties have committed to provide a senior unsecured bridge
facility in aggregate principal amount of $2.0 billion for the
purposes of funding (i)a portion of the cash consideration for
the Transaction and (ii)the fees and expenses incurred in
connection with the Transaction. The financing commitments of the
Commitment Parties are subject to various conditions set forth in
the Commitment Letter.
| Item7.01 | Regulation FD Disclosure. |
On December 6, 2016, Equinix issued a press release announcing
the Transaction. A copy of Equinixs press release is attached
hereto as Exhibit 99.1.
The information furnished in Item7.01 of this Form 8-K and in
Exhibit 99.1 attached hereto shall not be deemed filed for
purposes of Section18 of the Securities Exchange Act of 1934 (the
Exchange Act) or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any
filing under the Securities Act or the Exchange Act, except as
expressly set forth by specific reference in such a filing.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This Current Report on Form 8-K (the Current Report) contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and other securities
laws, including statements regarding the proposed Transaction and
the Commitment Letter. The forward-looking statements involve
risks and uncertainties. Actual results may differ materially
from expectations discussed in such forward-looking statements.
Although Equinix believes that its forward-looking statements are
based on reasonable assumptions, expected results may not be
achieved, and actual results may differ materially from its
expectations. Factors that might cause such a material difference
include, without limitations, risks related to Equinixs ability
to complete the Transaction on the proposed terms and schedule;
whether Equinix or Verizon will be able to satisfy Equinixs and
Verizons respective closing conditions related to the
Transaction; whether Equinix will obtain financing for the
Transaction on the expected timeline and terms; risks associated
with the Transaction, such as the risk that the Business will not
be integrated successfully, that such integration may be more
difficult, time-consuming or costly than expected or that the
expected benefits of the Transactions will not occur; risks
related to future opportunities and plans for the Business,
including uncertainty of the expected financial performance of
the
Business; disruption from the Transactions making it more
difficult to conduct business as usual or maintain relationships
with customers, employees or suppliers; and whether Equinix will
be able to satisfy the closing conditions to the financing
commitments set forth in the Commitment Letter.
Equinixs forward-looking statements should not be relied upon
except as statements of Equinixs present intentions and of
Equinixs present expectations, which may or may not occur.
Cautionary statements should be read as being applicable to all
forward-looking statements wherever they appear. Except as
required by law, Equinix undertakes no obligation to release
publicly the result of any revision to these forward-looking
statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of
unanticipated events. Readers are also urged to carefully review
and consider the various disclosures Equinix has made in this
Current Report, as well as Equinixs other filings with the
Securities and Exchange Commission (the SEC), including Equinixs
Quarterly Report on Form 10-Q filed with the SEC on November4,
2016 and Equinixs Annual Report on Form 10-K, filed with the SEC
on February26, 2016. Equinix does not assume any obligation to
update the forward-looking information contained in this Current
Report.
| Item9.01. | Financial Statements and Exhibits |
(d) Exhibits
|
Exhibit No. |
Description |
|
| 2.1 |
Transaction Agreement, dated as of December 6, 2016, by and between Verizon Communications Inc. and Equinix, Inc.* |
|
| 99.1 | Press Release issued by Equinix on December 6, 2016. |
| * |
Certain schedules and exhibits to this agreement have been omitted in accordance with Item601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. |
About EQUINIX, INC. (NASDAQ:EQIX)
Equinix, Inc. is engaged in connecting companies to their customers and partners inside the interconnected data centers. The Company operates in three segments: Americas; Europe, the Middle East and Africa, and Asia-Pacific. The Company’s platform Equinix combines a footprint of International Business Exchange (IBX) data centers, interconnection opportunities and ecosystems. It offers colocation, interconnection solutions, and managed Information Technology infrastructure and professional services. Its Colocation offerings include cabinets, power and IBXflex. Its Interconnection offerings include Physical Cross Connect/Direct Interconnections, Equinix Internet Exchange, Equinix Metro Connect, Internet Connectivity Services, Equinix Cloud Exchange and Equinix Performance Hub. Its Equinix Professional Services include Cloud Consulting Services, Global Solutions Architects, Solution Validation Centers, Smart Hands Services, Equinix Customer Portal and Business Continuity Trading Rooms. EQUINIX, INC. (NASDAQ:EQIX) Recent Trading Information
EQUINIX, INC. (NASDAQ:EQIX) closed its last trading session down -2.59 at 329.49 with shares trading hands.