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SEC Filings

10-Q
EQUINIX INC filed this Form 10-Q on 11/02/2018
Entire Document
 
EQUINIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

The nature of the intangible assets acquired from the Itconic acquisition is customer relationships with an estimated useful life of 15 years. The fair value of customer relationships was estimated by applying an income approach. The Company applied a discount rate of 16.0%, which reflected the risk and uncertainty of the estimated future operating cash flows. Other assumptions included projected revenue growth, customer attrition rates and operating margins. The fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in the accounting standard for fair value measurements. Goodwill is attributable to the workforce of the acquired business and the projected revenue increase from future customers expected to arise after the acquisition.
On October 6, 2017, the Company acquired Zenium's data center business in Istanbul for a cash payment of approximately $92.0 million. Zenium's operating results have been reported in the EMEA region following the date of acquisition. The nature of the intangible assets acquired from this acquisition is customer relationships with an estimated useful life of 15 years.
During the three months ended September 30, 2018, the Company completed the detailed valuation analysis to derive the fair value of assets acquired and liabilities assumed from the Itconic and the Zenium data center acquisitions and updated the final allocation of purchase price from the provisional amounts reported as of December 31, 2017. The adjustments for Zenium data center acquisition primarily resulted in an increase in property, plant and equipment of $5.2 million and a corresponding decrease in other assets of $5.2 million. The adjustments for Itconic primarily resulted in a decrease in property, plant and equipment of $3.6 million and an increase in goodwill of $2.6 million. The changes in fair value of acquired assets and liabilities assumed did not have a significant impact on the Company’s results of operations for the three and nine months ended September 30, 2018.
The final purchase price allocations for both acquisitions are as follows (in thousands):
 
Itconic
 
Zenium
data center
Cash and cash equivalents
$
15,659

 
$
692

Accounts receivable
16,429

 
198

Other current assets
1,885

 
6,430

Property, plant, and equipment
64,499

 
58,931

Intangible assets
101,755

 
7,900

Goodwill
127,711

 
21,834

Other assets
4,025

 
313

Total assets acquired
331,963

 
96,298

Accounts payable and accrued liabilities
(15,846
)
 
(1,012
)
Other current liabilities
(12,374
)
 
(451
)
Capital lease and other financing obligations
(30,666
)
 

Loans payable
(3,253
)
 

Deferred tax liabilities
(3,198
)
 
(2,227
)
Other liabilities
(7,515
)
 
(614
)
Net assets acquired
$
259,111

 
$
91,994


On February 3, 2017, the Company acquired IO UK's data center operating business in Slough, United Kingdom, for a cash payment of £29.1 million or approximately $36.3 million at the exchange rate in effect on February 3, 2017 ("IO Acquisition"). The acquired facility was renamed London 10 ("LD10") data center. LD10's operating results have been reported in the EMEA region following the date of acquisition. As of December 31, 2017, the Company finalized the allocation of purchase price for the acquisition.

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