Equinix has added a second Internet Business Exchange (IBX) data center in Tokyo by acquiring the long-term building lease and related assets from VSNL International. The facility will add approximately 740 sellable cabinets and approximately 73,000 square feet, increasing Equinix’s Tokyo footprint to approximately 116,000 square feet. Equinix intends to place new customers in the center during the fourth quarter of 2007. Acquisition terms were not disclosed.
VSNL International will continue to operate in the center as a long-term customer of Equinix, providing its standard suite of communications services to its customers in Tokyo, including colocation services. Existing VSNL International customers, several of whom are already operating in other Equinix IBX centers, will remain in the center as VSNL International customers.
Equinix said it intends to invest $25.0 to $30.0 million of capital expenditures in 2007 to make additional infrastructure enhancements to this center. The center is expected to generate, at capacity, annual revenues between $20.0 and $25.0 million. Equinix expects long-term cash gross margins from this expansion to be in excess of 65%, consistent with the company’s model for previous expansion centers.
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