Equinix and GIC to Form Greater than US$1.0 Billion Joint Venture to Develop and Operate Hyperscale Data Centers in Japan

REDWOOD CITY, Calif., April 21, 2020 /PRNewswire/ -- Equinix, Inc. (Nasdaq: EQIX), the global interconnection and data center company, today announced the signing of a greater than US$1.0 billion initial joint venture in the form of a limited liability partnership with GIC, Singapore's sovereign wealth fund, to develop and operate xScale(TM) data centers in Japan.

The three initial facilities in the joint venture - one in Osaka and two in Tokyo -- will serve the unique core workload deployment needs of a targeted group of hyperscale companies, including the world's largest cloud service providers. With these xScale data centers, hyperscale companies can add core deployments to their existing access point footprints at Equinix, enabling their growth on a single platform that can immediately span 55 global metros and offer direct interconnection--within a vibrant set of ecosystems--to their customers and strategic business partners.

Rapid growth of the digital economy has driven increasing demand for global connectivity and hybrid multicloud solutions. For years, the world's largest cloud service providers, including Alibaba Cloud, Amazon Web Services, Google Cloud, IBM Cloud, Microsoft Azure and Oracle Cloud Infrastructure, have partnered with Equinix to leverage its global platform of 210 data centers to directly connect to their strategic business partners and customers. As these companies continue to expand in Asia-Pacific, they require capacity at scale to match their internal compute, storage and edge cache requirements.

Highlights/Key Facts:

    --  The initial three facilities included in the joint venture will provide
        approximately 138 megawatts (MW) of power capacity to the Osaka and
        Tokyo markets when fully built-out.
    --  xScale data centers provide hyperscale companies with a differentiated
        value proposition from existing wholesale data center operators in two
        key areas:
        --  xScale data centers offer access to Equinix's comprehensive suite of
            interconnection and edge services. These services will tie into the
            hyperscale companies' existing access points at Equinix, thereby
            increasing the speed of connectivity to their existing and future
            enterprise customers.
        --  xScale data centers are engineered to meet the technical and
            operational requirements and price points of core hyperscale
            workload deployments. This enables hyperscale companies to
            consolidate core and access point deployments into one global
            provider to streamline and simplify their rapid growth.
    --  Platform Equinix(®) offers the most access points--the "on- and
        off-ramps to the cloud"--to the top global cloud service providers. As
        hyperscale companies scale their operations at Equinix, the ecosystem of
        nearly 10,000 enterprises and other companies currently operating at
        Equinix benefit from increased opportunities to directly connect and
        operate in proximity to the largest global cloud operators.
    --  Japan is the third-largest economy in the world[1] and a significant hub
        for regional interconnection. As one of the world's largest metro areas
        and a fulcrum of the Japanese economy, Tokyo is home to a large
        concentration of global and regional corporate headquarters which form a
        critical mass of end-user customers with high demand for hyperscale
        services. Osaka is centrally located, contains the second-highest
        concentration of businesses in Japan, and is a center for start-up
        companies and innovation.[2] Both metros currently have constrained
        supply, yet are priorities for hyperscale growth, according to Structure
        Research[3].
    --  Equinix is a top data center provider in Japan with 13 International
        Business Exchange(TM) (IBX(®)) data centers and more than 500
        employees.
    --  In 2019, Equinix and GIC announced the formation of a joint venture to
        develop and operate xScale data centers in Europe.
    --  Private connectivity between enterprises, strategic cloud service
        providers and network services is growing as a strategy of choice for
        businesses, as digital transformation fuels higher demand for localized
        digital services at the edge. According to the Global Interconnection
        Index, Volume 3, a market study published by Equinix, interconnection
        bandwidth growth in Asia-Pacific is forecast to reach 3,825+ Tbps by
        2022, which is 28% larger than Europe. The Cloud & IT Services segment
        in Asia-Pacific is forecast to grow at a 50% CAGR, outpacing all other
        regions globally, reaching a total bandwidth that is 49% larger than
        North America and 119% larger than EMEA by 2022.

Financial Details:

    --  Under the terms of the agreement, GIC will own an 80% equity interest in
        the joint venture and Equinix will own the remaining 20% equity
        interest. The joint venture is expected to close in 2H 2020, pending
        regulatory approval and other closing conditions.
    --  Upon closing of this joint venture, GIC is expected to have contributed
        cash to fund its 80% equity interest in the joint venture. Equinix is
        expected to have transferred its Tokyo TY12 and Osaka OS2 development
        assets, along with development rights and the land for an additional
        data center in Tokyo, to the joint venture in return for a 20% equity
        interest in the joint venture and net cash proceeds in excess of US$100
        million.
    --  Financing for the joint venture is also expected to close in 2H 2020 and
        is anticipated to consist of a delayed draw term loan facility and a
        revolving credit facility. Proceeds from the delayed draw term loan
        facility are expected to fund a portion of the consideration paid to
        Equinix for the sale to the joint venture of TY12 and OS2 development
        assets, as well as to fund a portion of the planned development and
        construction costs for those assets. The revolving credit facility is
        expected to be available for working capital needs and other general
        corporate purposes of the joint venture.
    --  Citi served as exclusive financial advisor to Equinix in connection with
        this transaction.

Quotes:

    --  Jabez Tan, Head of Research, Structure Research:"Japan is a strategic
        country for regional hyperscale expansion, and the demand for data
        center capacity in the Tokyo and Osaka markets has outstripped supply.
        Through this new joint venture, Equinix and GIC will be a top provider
        of new data center capacity for the world's largest hyperscale companies
        seeking to expand in these two strategic markets - leveraging Equinix
        for both their core workload and interconnection requirements. This
        expansion aims to accelerate the adoption of hybrid and multicloud
        architectures by companies throughout the region."

    --  Charles Meyers, President and CEO, Equinix:"Hybrid and multicloud have
        emerged as the clear IT architecture of choice, and Equinix is
        continuing its efforts to satisfy both the interconnection and core
        workload needs of the top hyperscale and cloud companies powering this
        infrastructure. Following our successful partnership with GIC on the
        initial xScale data center joint venture in Europe announced last year,
        we are now continuing our partnership with the formation of a new joint
        venture in Japan. The new facilities under this JV will allow our
        hyperscale customers to streamline their continued growth, while
        strengthening Equinix's leadership position in the cloud ecosystem."

Additional Resources

    --  Equinix and GIC to Form Hyperscale Joint Venture in Asia-Pacific [blog]
    --  Learn more about Platform Equinix [website]
    --  Global Interconnection Index Volume 3 [market study]
    --  Equinix and GIC Partner to Develop Hyperscale Data Centers in Europe
        [Structure Research report]

About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects the world's leading businesses to their customers, employees and partners inside the most-interconnected data centers. On this global platform for digital business, companies come together across more than 50 markets on five continents to reach everywhere, interconnect everyone and integrate everything they need to create their digital futures. www.equinix.com.

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, risks related to Equinix's ability to complete the closing of the Joint Venture on the proposed terms and schedule; risks related to Equinix or GIC being able to satisfy their respective closing conditions related to the Joint Venture, including obtaining regulatory approval; any inability of Equinix, GIC or the Joint Venture to obtain financing as needed; risks related to whether the data centers which will be contributed to the Joint Venture will be integrated successfully, and whether such integration may be more difficult, time-consuming or costly than expected; risks that the expected benefits of the Joint Venture will not occur; the challenges of operating and managing data centers and developing, deploying and delivering Equinix services; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; competition from existing and new competitors; the loss or decline in business from key hyperscale companies; disruption from the Joint Venture making it more difficult to conduct business as usual or maintain relationships with customers, employees or suppliers; and other risks described from time to time in Equinix's filings with the Securities and Exchange Commission. In particular, see recent Equinix 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.

[1] Nasdaq: "The 5 Largest Economies In The World And Their Growth In 2020" https://www.nasdaq.com/articles/the-5-largest-economies-in-the-world-and-their-growth-in-2020-2020-01-22
[2] RocketSpace: https://www.rocketspace.com/corporate-innovation/japans-3-hottest-cities-for-startups-and-innovation
[3] Structure Research: Japan DCI Report 2020: Data Centre Colocation, Hyperscale Cloud & Interconnection

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