Equinix, Inc. (Nasdaq: EQIX) says it has agreed to acquire four data centers from Chilean communications services provider Empresa Nacional De Telecomunicaciones S.A. (Entel). The facilities, three in Chile and one in Peru, have an enterprise value of approximately $705 million. The acquisition is expected to close in the second quarter of this year; the inclusion of the Peruvian facility is pending finalization of a definitive agreement.
If consummated, the deal would mark Equinix’s entry into the two South American countries. The three Chilean facilities are in the Santiago metro area, specifically in downtown Santiago, Ciudad de los Valles, and Longovilo. The Tier III data center in Peru is located in Lima. The facilities combined serve more than 100 customers who will become Equinix customers; more than 75 of these will be net-new customers, Equinix says. Together, the four facilities generate approximately $53 million of annualized revenue, Equinix estimates. The deal thus carries a purchase multiple of approximately 23X EV/2021 adjusted EBITDA including Equinix SG&A expenses.
In addition to the data centers, the deal would also see approximately 120 Entel employees and contractors become Equinix employees or contractors. The addition of sites in Chile and Peru would bring to five the number of Latin American countries in which Equinix will own data centers, joining Brazil, Colombia, and Mexico.
"Latin America holds enormous potential, and our commitment to the region has exponentially grown since we entered back in 2011," said Charles Meyers, president and CEO of Equinix. "Chilean, Peruvian, and multinational companies are thirsting for the digital infrastructure required to thrive in today's economy; with today's expansion, we're broadening digital access and accelerating digital transformation across Latin America, while supporting growth in a responsible and sustainable manner."
Post-close, Equinix and Entel will partner to enable enterprises in Chile and Peru to access hybrid multicloud services. "This strategic partnership with Equinix, a world-leading digital infrastructure company, allows us to focus our resources on businesses that add value to our customers,” commented Antonio Büchi, CEO of Entel. “Entel has transformed over the years, and this partnership, which is more than an infrastructure transaction, is intended to set an important milestone in our strategic plan to extend our offerings into delivering digital services and provide expertise with new solutions that will accelerate our client's digital transformation."
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