Equinix, Inc. the global interconnection and data centre company, has announced that its Board of Directors has approved a plan for Equinix to pursue conversion to a real estate investment trust (REIT). Equinix’s Board reached this decision after thorough analysis of various structures, including alternative financing, capital, and tax strategies, designed to maximize long-term shareholder value. If Equinix is ultimately successful in the conversion process, Equinix expects to elect REIT status for its taxable year beginning January 1, 2015.
Peter Van Camp, Executive Chairman of Equinix, said, “We are committed to creating long-term shareholder value. The REIT structure supports this objective and positions us to achieve profitable, strategic growth domestically and internationally. We believe the conversion process, and the REIT structure itself, will have virtually no impact on the delivery of services to our customers or the performance of our global platform of high performance data centers.”
“As a REIT, we will be able to provide our shareholders with regular distributions from earnings. While operating as a REIT, we will continue to fully execute on our global growth strategy of expanding in markets where demand and financial return warrant. We are executing with discipline and focus, and remain on target to generate over $3.0 billion in annual revenue by 2015 and positive adjusted free cash flow in 2013, excluding REIT conversion costs and tax liabilities,” said Steve Smith, CEO of Equinix. “We have already seen several of our peers in the data center industry operate under a REIT structure, and we believe that this tax-efficient structure will enhance shareholder value and enable us to be even more competitive.”