Data Center Finance: Telecity Agrees To Merger With Interxion

Data center operators Telecity Group and Interxion announced in early February that they would be merging.

The merger was structured as an offer for Interxion by Telecity and will create a data center operator with a total value of close to $4.5 billion.The deal comes at a time when the industry in Europe, where Telecity is based, is scrambling to meet rapidly increasing demand for digital services. The new combined company will have a primary listing in London, as Telecity operates facilities in the city, as well as in Paris and Frankfurt. Interxion was previously listed in New York and operates a total of 39 data centers in 11 European countries.

"Bringing together the assets and solutions offered by Interxion and Telecity will improve our customers' ability to realize the benefits of transitioning to the cloud," said Interxion CEO David Ruberg. "Together, we expect to be able to further reduce our customers' total cost of operation, help them deliver improved functionality to their customers, and deliver industry leading quality of service."

The deal is expected to be completed by the second half of 2015, but is first subject to shareholder and regulatory approval. The merger will boost earnings for both companies starting in 2017. Just the news of the partnership has been good for business, with Telecity shares increasing 15 percent after the deal was announced. Ruberg will take control of the joint operation for the next year, and John Hughes will continue serving as Telecity executive chairman until the transaction is completed, at which time he will become chairman of the combined organization.

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