Equinix has entered the South American data center market by acquisition of Brazilian data center provider Alog. Equinix has closed the deal, in which it partnered with the private-equity firm Riverwood Capital, according to a statement the two buyers released on 26 April.

Equinix invested about US$83m into Alog, about $68m of which went toward acquisition costs and the rest for future data center expansion. Equinix will hold a controlling interest in Alog and will sit on its board, while Riverwood will hold a minority stake.

Members of Alog’s management team will hold about 10% of the company. Its current CEO Sidney Breyer will retain his position.

Charles Meyers, president of the Americas at Equinix, said in a statement that Alog’s strong position in the region and its complementary business model would ensure a quick entry into South America for the US-based global retail colocation giant.

"Now that the acquisition is complete, we’ll be working closely with Alog management to ensure that the business, operational and customer service processes meet Equinix standards, and to ensure best-of-breed practices in data center build, design and operation," he said.

The deal adds two active data centers in Sao Paolo and Rio de Janeiro to Equinix’s footprint. A third Alog facility is expected to come online in June 2011 in Tamboré, a Sao Paolo suburb.

The two existing data centers are serving about 1,000 customers.

Three years from the acquisition’s closing date, Equinix will have the right to buy the remaining stake in the company and, under certain circumstances, may be required to do so.