By Paul Smith, Financial Review

December 18, 2017

The Australian managing director of US data centre giant Equinix said it is in a position to capture a bigger portion of the national market from rival providers after it sealed a $1.035 billion deal to buy Aussie provider Metronode on Monday.

The deal, revealed by Street Talk on Sunday evening, came after Metronode's owners, the private equity arm of Ontario Teachers' Pension Plan, ran an auction process over recent months, with potential buyers including Singapore's ST Telemedia and US infrastructure investor Stonepeak.

The companies run data centres that host the technology infrastructure for cloud service providers, network providers and enterprise clients. These clients increasingly run their systems in distributed data centre locations, rather than owning their own equipment.

Equinix also offers interconnection services, which enables organisations to connect their disparate systems and services together from its data centre locations. The deal makes it the largest supplier in Australia, a market it contests with the likes of Global Switch, ASX-listed NextDC and Digital Realty.

Equinix Australia managing director Jeremy Deutsch told The Australian Financial Review the deal had been a competitive one to win, and it now meant it would have a physical presence in more capital cities.

“We have been running a very successful business in Australia, primarily focused on Sydney and Melbourne up until this stage, but a lot of our customers have been asking us to be present in the other markets like Perth and Canberra,” Mr Deutsch said.

“[Future deals] really come down to what our customers are after, and that comes down to more locations, greater choice on where they can distribute to the edge of the network and how they can build their interconnection solutions.”

Local growth

Metronode has 10 Australian data centres and has generated approximately $60 million of revenue in the 12 months ending September. The acquisition means Equinix will have 15 data centres across Sydney, Melbourne, Perth, Canberra, Adelaide and Brisbane.

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