Nov. 5, 2003 -- Internet exchange operator Equinix, Inc. said late today that it will l commence a public offering of 3.5 million shares of common stock. The offering, is expected to be priced on Nov. 17 following a week of investor presentations.
Existing shareholder STT Communications Ltd. has agreed to purchase 916,500 shares in the offering at the public offering price, according to Equinix, which said it also will grant underwriters Citigroup Global Markets an option to purchase up to approximately 525,000 additional shares to cover any over-allotments.
Equinix said it intends to use the net proceeds from the offering for "general corporate purposes." The company is in discussions with its bank lenders about using half the proceeds to pay down its credit facility in exchange for a one-year extension on the loan, according to an FAQ on the offering.
"By paying down the credit facility in 2003, Equinix can reduce the amortization due in 2005 to approximately $12 million – down from $77 million," the company said of its strategy. "This eliminates a potential pressure point in its operations in 2005."
SG Cowen Securities Corporation is a co-lead manager and Needham & Company, Inc. and Adams Harkness & Hill, Inc. will act as co-managers.
Equinix has just over 9 million shares trading, and has issued options, warrants and convertible shares that can be exchanged for another 12.5 million shares.
The filing follows a period of consolidation and change at Equinix. Less than a 10 months after a complex series of deals created "New Equinix," the Foster City, Calif. company has transformed its balance sheet, expanded into the Asian market, and seen its stock price soar.
The Dec. 31 completion of the restructuring was followed on April 30 by an investment of an additional $10 million from Crosslink Capital, and the announcement of a series of new clients in its Asian operation, including Fujitsu and Telekom Malaysia.
Equinix has nine US data centers spanning 855,000 square feet. Seven of those centers are cash-flow positive, with a company-wide "fill rate" of about 31 percent of the usable data center space, according to Taylor. The company has 275 workers.
Equinix' customer list includes IBM, Google, Sony Online, General Electric, Electronic Arts, Yahoo!, and Microsoft.
Equinix provides core Internet exchange services that allow Internet infrastructure companies, enterprises and content providers to grow, manage and control their networks.