19. April 2006
IXEurope acquires 11th datacentre and secures major corporate contract
IXEurope plc ("IXEurope"), one of Europe's largest and fastest growing independent datacentre outsourcers which listed on AIM on 7 April, has acquired its eleventh datacentre, in Munich, and signed a substantial contract with a leading global internet company. The contract is worth in excess of �6.9 million (�10 million) over a six year period.
The 11,600m2 Munich datacentre, the Group's fourth in Germany, was built in 2000 for KPNQwest at a cost in excess of �17 million (�25 million) to provide approximately 4,600m2 of net datacentre space. The datacentre asset has been acquired for a nominal amount together with a long lease for the property.
IXEurope plans to invest approximately �1 million (�1.5 million) on refurbishing and upgrading the Munich datacentre to bring the operational infrastructure in line with that of the Group's other datacentres. The site, which will be opened in phases over the next 12 months, is expected to become EBITDA positive within a short period and to have an overall positive effect on Group 2006 EBITDA.
The customer, already hosted in two other IXDatacentre locations in Europe, will become the first major occupant of the Munich IXDatacentre.
Guy Willner, Chief Executive Officer of IXEurope said:
"The purchase of this substantial enterprise quality datacentre in Munich and the signing of our first major customer for the facility demonstrate our ability to acquire datacentres at attractive prices with the support and trust of existing customers. We now have well over a quarter of a million square feet of capacity when we include both existing and planned extensions to our 11 datacentre portfolio.
“We are particularly pleased that this new customer has committed to a multi-year contract, which enables us to achieve EBITDA positive from Munich shortly after the acquisition. We continue to regard Germany as a market ripe for further datacentre growth as the economy recovers."
For further details
Karen Bach, Chief Financial Officer
020 7689 1400
Adrian Duffield/Ben Way
020 7457 2020
IXEurope is one of Europe's fastest growing providers of datacentre services. Its principal activities include primary datacentre services, connectivity services and business continuity solutions.
IXEurope provides datacentre capacity and service to over 400 clients in the enterprise, internet and telecoms sectors. IXEurope's customer base includes Merrill Lynch, Capgemini, Google (a member of the IXEurope internet exchange in Zurich) and France Telecom.
Launched in 1999, IXEurope has achieved rapid customer growth, with annual revenue growth of over 30 per cent. for the past six years. The Group operates (before today's announcement) ten IXDatacentres in four European countries: the UK, Germany, France and Switzerland. This provides IXEurope with exposure to more than 59 per cent. of the European IT services market and also offers exposure to the different stages of maturity of these markets.
IXEurope offers customers 99.999 per cent. service level agreements which is equivalent to a maximum of 5 minutes and 23 seconds of ��down-time'', planned or unplanned, in any twelve month period.
In 2005 revenue growth continued to be strong, rising by 45 per cent. to �22.5 million. The organic growth rate from existing datacentres was 39 per cent. The Company achieved �1.8m of underlying EBITDA over the same period, its first full year of positive EBITDA. Recurring revenues from long term contracts represented over 85 per cent. of the Group's 2005 revenue.
Gross profit rose by 59 per cent. in 2005 with gross margins rising to 44 per cent. in 2005, from 41 per cent. in 2004 and 36 per cent in 2003. IXEurope experienced a low churn rate of approximately 3 per cent. of revenues in 2005.
As at 31 December 2005, 79 per cent. of the total 16,800m2 of net fitted out capacity was contracted and the Group has a further 7,900m2 which can be fitted out within the existing datacentre portfolio.
IXEurope provides a range of datacentre services including co-location space, dedicated suites, network services, technical support and business continuity services. IXEurope works with enterprise and internet customers to provide resilient datacentre infrastructure to house their IT systems far more cost-effectively than through in-house provision.
The benefits include optimised IT performance, improved systems availability and reduced corporate risk through improved regulatory compliance. By continually focusing on quality, IXEurope also gives clients exceptional service levels and on-site access to a high level of technical expertise.
IXEurope was listed on the London Stock Exchange in April 2006.
For more information please visit the website at www.ixeurope.com
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of IXEurope into Equinix; a failure to receive significant revenue from customers in recently built out data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; the results of any litigation relating to past stock option grants and practices; and other risks described from time to time in Equinix's filings with the Securities and Exchange Commission. In particular, see Equinix's recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.
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