Equinix to buy 29 Verizon data centers for $3.6B

Verizon is selling its data center business to Equinix in a $3.6 billion cash deal as the communications giant focuses on digital transformation for its customers, the companies announced Tuesday.

Redwood City, Calif.-based Equinix will get 24 Verizon customer-facing data sites, which include  29 data center buildings across 15 metro areas in the U.S. and Latin America. Data centers typically store large amounts of data on hard drives.

However, the transaction doesn't affect Verizon’s managed hosting and cloud offerings, or the New York-based company's data center services delivered from 27 sites in Europe, Asia-Pacific and Canada.

The transaction is expected to close by mid-2017, the companies said.

After starting the trading day higher, shares of Equinix (EQIX)  closed down nearly 0.8% at $329.49 Tuesday. Verizon (VZ) shares closed 1.2% higher at $50.36.

Verizon has shifted its corporate focus to mobile video and advertising as it moves toward completing its $4.83 billion deal for Yahoo.

Equinix bills itself as the world's largest provider of IBX data centers, carrier-neutral facilities where major networks, enterprises, and business partners interconnect with each other and with more than 1,400 networks.

The company said the deal would further strengthen its global platform by increasing interconnection in the U.S. and Latin America. Additionally, the transaction will speed Equinix's penetration of the enterprise and strategic market sectors, including government and energy, the company said.

Equinix President and CEO Steve Smith predicted the deal would immediately boost the company's finances for shareholders. "The new assets will bring hundreds of new customers to Platform Equinix while establishing a presence in new markets and expanding our footprint in existing key metros," he said.

Follow Paste BN reporter Kevin McCoy on Twitter: @kmccoynyc