Equinix acquires four new data centres for $705 million as part of a global expansion project
Datacenter and cloud hub Equinix is expanding its portfolio by spending billions of dollars in acquisition. A recent report made headlines when Equinix was expanding into Chile and Peru. The company will pay $705 million to buy 4 Entel data centres.
Over the past two years, Equinix spent billions to increase its global market share. The company has over 220 data centres, including West African provider Main One. In India, Equinix has GPX Global Systems. The $705 million spending would enlarge Equinix's reach on Chile and Peru.
Charles Meyers, CEO and President of Equinix, talked about Latin American potential and their "commitment to the region." Since 2011, Equinix is ha part of the ever-growing region, and the investments are capable of expanding upon that.
Equinix shared their Q4 earnings on 31st December, which showed the company managed to generate approximately $1.71 billion in revenue. It is a 9 per cent increase year-over-year. The portfolio has 76 consecutive quarterly growth, which translates to 19 years of steady growth. Now that is a fascinating number.
And to increase revenue, the company buys out other companies with similar niches to develop further as a part of Equinix. So far, the strategy has worked tremendously in their favour.
Equinix is looking to get hands-on, more ready to use companies and expand business in different areas. Entel's four data centre acquisitions will give Equinix access to trade in five countries, including Latin America, Brazil, Colombia, Chile, Peru and Mexico.
It is essential to have the options available to accelerate digital transformation opportunities for local businesses and multinational ones. Equinix, Inc. (NASDAQ: EQIX) is a digital infrastructure company heavily specialised in data centre technology. Within 2022 Q2, Equinix planned to seal the deal of acquiring four new data centres.
These will be brought from Emperesa Nacional De Telecomunicaciones S.A. (“ENTEL”). It is a leading telecommunications provider from Chile, valued at approximately $705 million. Equinix managed to adjust funds from operators (AFFO) to complete the buyout.
After the acquisition, approximate 120 Entel employees and contractors will become Equinix employees or contractors. It is part of the acquisition agreement, so those working at those companies can keep their jobs. The facilities altogether generate about $53 million in revenue annually. Adjusted by 2021 EBITDA of Equinix SG&A expenses, the purchase multiplies by approximately 23xEV. (Data directly sourced from Equinix.)
Equinix managed to plan far ahead into the future as companies of this scale, generating billions in revenue, needs this kind of effort. Once the four Entel data centres are bought, Equinix may properly expand its business in five other countries.
Chile is the fourth largest county in SA with a high GDP. Businesses in that region should convert to a significant revenue margin. High GDP areas occasionally pay a reasonable amount for the latest tech, especially cloud computing or edge computing. There is no denying the IT infrastructure is not yet in its final form. And with the gradual evolution, transactions will take place in trillions.
Entel has over 100 customers that benefit from the four data centres. They will be converted to Equinix customers. They represent about 75 per cent of Equinix's new customers. They will benefit from 20 network service providers (NSPs) and a full-fledged competitive ecosystem.g
The data centres in Chile are located in the metropolitan area of Santiago. The Ciudad de los Valles is the primary data center in Santiago. According to our data collection, this location offers a possibility for easy expansion of Equinix.
CEO of Entel, Antonio Büchi, said: "our offerings into delivering digital services and provide expertise with new solutions that will accelerate our client's digital transformation." The Securities and Exchange Commission is particularly interested in handling the operation and seeing through the acquisition.