The European colocation market is attractive to U.S. companies seeking to capitalize on the strong demand for data center services and dwindling supply of quality colo space. This imbalance is acute in several major European markets, but perhaps nowhere moreso than London, where IXEurope has three data centers and is building a fourth. Other providers building new data centers in greater London include TelecityRedbus, Easyspace, Colt and Digital Realty Trust.

IXEurope CEO Guy Willner said the company’s 280,000 square feet of customer data center space was about 77 percent full. Colocation prices are strong in the UK and Switzerland, Willner said, but somehwat weaker in Germany and France, although demand has been strengthening in Paris.

Both companies said the deal will enable them to cross-sell services to their existing customer base. “Customers are increasingly demanding global solutions as the colocation industry continues to grow at double digit rates, and IXEurope has become one of the top providers of colocation services in Europe, operating high-quality data centers in key markets,” said Steve Smith, CEO of Equinix.

Under the terms of the acquisition, IXEurope shareholders will receive 125 pence (approximately $2.50 US) for each IXEurope share. Shares of IXEurope dropped 5.7% to 124 pence Thursday, as some investors were apparently hoping for a higher premium on any buyout.