InterXion shares rise in debut-UPDATE 2

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Friday January 28, 2011 12:51:17 AM GMT

* Shares up as much as 18.5 percent

* Trading on NYSE under symbol "INXN"

* IPO raises $264.9 million at top of proposed range

* Dutch firm seen raising U.S. profile -analyst

(Rewrites first paragraph, add analyst comment, details of competitors and U.S. market, latest share price)

By Alina Selyukh

NEW YORK, Jan 28 (Reuters) - Shares of InterXion Holding NV rose as much as 18.5 percent in their stock market debut on Friday as the Netherlands data center company works to establish its footprint in the U.S. market.

The stock rose as high as $15.40, or 18.5 percent above its $13 IPO price, in early New York Stock Exchange trading. It later gave up some of the gains to trade at $14, up 7.7 percent.

Amsterdam-based InterXion so far has no physical presence in the United States. In Europe it is one of the largest carrier-neutral colocation data center services providers, with 28 data centers across 11 countries.

"It'll be interesting over the next two or three years to see if InterXion makes a bigger play in the United States," said Todd Weller, Internet infrastructure analyst at Stifel Nicolaus & Co.

"They will have to prove they can compete," he said.

In the U.S. market, InterXion is facing competition from heavyweight incumbents such as Equinix Inc, which last spring bought out Switch & Data, which had served as InterXion's access to the U.S. market through a business partnership.

Late last year, InterXion entered into another transatlantic agreement, partnering with privately held data center host Telx.

"We can read into these partnerships that it's a really important market for InterXion," Weller said, suggesting the European firm could expand by either building data centers in the United States or acquiring established U.S. peers.

InterXion's U.S. listing comes four months after people familiar with the matter said InterXion-owner Baker Capital had hired Morgan Stanley to explore a sale of the company.

However, some of the people said at the time that Baker's high price expectations -- equivalent to more than 10 times earnings before interest, tax, depreciation and amortization -- could deter bidders.

InterXion's IPO also opens doors for U.S. investors to the growing European Internet technology scene. Its top-of-range pricing on Thursday helped lift shares of its UK competitor, data center operator Telecity Group Plc, which rose as much as 6 percent to a six-week high on Friday. For details, see

InterXion said it would use the IPO proceeds for general corporate purposes, including construction of new data centers, according to a filing with U.S. regulators.

On Thursday, the data center operator raised about $264.9 million, selling 20.4 million shares for $13 each, an underwriter said. Underwriters on the offering were led by Bank of America Merrill Lynch, Citigroup and Barclays Capital. (Additional reporting by Quentin Webb in London; Editing by Lisa Von Ahn, Phil Berlowitz)

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