Equinix, Inc. (NASDAQ: EQIX) says it has agreed to buy 13 data center sites in Canada from BCE Inc. (commonly known as "Bell"). The data center service company will pay $750 million (CAN$1.041 billion) in cash, with the deal expected to close in the second half of this year. Bell and Equinix also will partner to enable the delivery of hybrid multicloud services in Canada.
The 13 data center sites represent 25 Bell data center facilities; while Equinix counts a building as a single "data center," Bell counts each expansion within a building as a separate data center. The 13 buildings bring with them add more than 600 customers (more than 500 of them new) to Equinix’s roster as well as expands the company’s footprint outside of the two International Business Exchange data centers it already operates in Toronto. New Equinix metro markets the acquisition will add include Calgary, Alberta; Kamloops and Vancouver, British Columbia; Millidgeville, New Brunswick; Montreal, Quebec; Ottawa, Ontario; and Winnipeg, Manitoba.
The purchase is expected to be immediately accretive to Equinix's adjusted funds from operations (AFFO) per share upon close, excluding integration costs. The company expects the new assets to generate approximately $105 million (CAN$150 million) annualized revenue (Q4'20E LQA), making the purchase multiple approximately 15X EV/adjusted EBITDA.
"The acquisition of these 13 strategic assets further extends the depth and breadth of Equinix's global platform, which currently spans 26 countries and 55 metros. It will position Equinix as a market leader for data center and interconnection services in Canada, with high-quality assets from coast to coast and a large, diversified ecosystem of Canadian businesses. Additionally, it opens key gateways for North America to Asia through Vancouver and North America to Europe through the submarine cable systems in the Millidgeville area," commented Jon Lin, president, Americas, at Equinix.
The strategic partnership will combine Bell's telecommunications services with Equinix's global data center platform. "Our partnership with Equinix will further accelerate digital transformation opportunities for Canadian enterprise customers, combining access to Equinix's interconnected global data center platform with Bell's advanced broadband network connections, wide range of cloud solutions, and experienced professional services team," said Tom Little, president, Bell Business Markets.
Equinix has been aggressive with expansion via mergers and acquisitions, including working with Tier 1 communications services providers who no longer want to own their own data centers (see, for example, “Equinix completes Verizon data center buy”).
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