Deal accelerates digital transformation
opportunities for local, regional and global companies
REDWOOD
CITY, Calif., May 3, 2022
/PRNewswire/ -- Equinix, Inc. (Nasdaq: EQIX), the world's
digital infrastructure company™, today announced it has extended
Platform Equinix® deeper into Latin
America following the completion of the acquisition of four
data centers in Chile from Empresa
Nacional De Telecomunicaciones S.A. ("Entel"), a leading
Chilean telecommunications provider. Equinix also announced it has
signed an agreement to acquire one additional data center in
Peru, also from Entel, subject to
the satisfaction of closing conditions. The enterprise value for
the five data centers is approximately US$735 million at current exchange rates in
effect on the dates of signing.
Equinix has a decade-long history in Latin America and currently operates 11
International Business Exchange™ (IBX®) data centers in
Brazil, Colombia and Mexico. The addition of four new data centers
in the strategic Santiago, Chile
metro—a growing data center and technology hub—provides an
opportunity for local businesses and multinational companies to
accelerate their digital transformation while solidifying Equinix's
position as the largest provider of digital infrastructure services
in the region. The new data centers offer significant
expansion capacity for future growth in Santiago, allowing Equinix to support both
immediate and future customer needs.
Under the terms of the agreement, Equinix and Entel
have agreed to form a strategic partnership to enable enterprises
to leverage hybrid multicloud solutions to accelerate their digital
transformation.
Highlights / Key Facts
- The addition of the five data centers is expected to be
immediately accretive to Equinix's adjusted funds from operations
(AFFO) per share upon close, excluding integration costs. The
acquisition of the data center in Peru is expected to close in coming quarters,
subject to the satisfaction of closing conditions. The five
facilities generate approximately US$55
million of annualized revenue using current exchange rates
in effect on the dates of signing and represent a purchase multiple
of approximately 23x EV / 2021 adjusted EBITDA including Equinix
SG&A expenses.
- Chile is the fourth-largest
economy in South America, with the
highest GDP per capita in the region. Santiago is emerging as a technology hub in
South America, serving both
regional cloud and content demand as well as local enterprises.
- The four data centers in the Santiago metro include:
-
- The Ciudad de los Valles location, which features two data
centers with approximately 170,000 gross square feet combined, and
is the largest multitenant data center site in Santiago, with ample expansion
opportunities.
- The downtown Santiago site,
which features approximately 46,000 gross square feet. It is a
network-dense facility adjacent to the Entel Tower, a key internet
exchange facility in the market that is close to the city
government center.
- The approximately 31,000 gross square foot facility in
Longovilo, which is strategically located away from the city center
to meet the backup and disaster recovery needs of customers,
including financial institutions.
- The data center in Peru is
approximately 16,000 gross square feet and is a well-established
site located in Lima.
- Approximately 100 Entel employees and contractors are expected
to become Equinix employees or contractors under the terms of the
agreement.
- The more than 100 Entel customers currently operating in the
four data centers will become Equinix customers, with more than 75
of these representing net-new customers. The acquired customers
comprise a diversity of sectors and include over 20 network service
providers (NSPs) and a strong financial services ecosystem, with
leading local and global players.
- By expanding its platform to the Southern Cone, Equinix will
extend its presence to five countries in Latin America, including Brazil, Chile, Colombia, Mexico and Peru, operating 16 IBX data centers in seven
metros.
- Equinix plans to introduce a full range of interconnection and
digital services to the four data centers in Chile, including Equinix Fabric™,
Network Edge, Equinix Internet Exchange®, Equinix
Internet Access and Metro Connect®, upon the completion of the
business integration. This will enable customers in Chile to connect in real time, directly and
privately, to more than 10,000 companies, including more than 2,000
networks and ~3,000 cloud and IT service providers, through
Platform Equinix for increased performance, security and scale.
- Chile also has access to
non-conventional renewable energy (NCRE) such as solar, hydro and
wind, which not only offsets data center operating costs, but
significantly contributes toward carbon neutrality.
- Citi served as exclusive financial advisor
to Equinix in connection with this transaction.
Quote
- Tara Risser, President,
Americas, Equinix:
"We continue to see demand from
businesses in Latin America,
across all sectors, looking to transform their operations to be
digital and cloud-enabled. Equinix's expansion into Chile and Peru accelerates digital transformation
opportunities in this rapidly growing region and is a critical step
in our long-term strategy to broaden digital access for our
customers globally. Chile's access
to sustainable energy sources such as solar, hydro and wind helps
our customers in the region—as well as multinationals doing
business with them—to grow responsibly and sustainably, which
aligns with our global sustainability strategy."
Additional Resources
- Equinix Enters Africa, Closing the US$320 Million Acquisition of MainOne [press
release]
- Equinix Expands to India with
Acquisition of GPX India [press release]
- Equinix Completes US$780 Million
Acquisition of 13 Bell Data Centers in Canada [press release]
- Platform Equinix [website]
- Equinix Bolsters Digital Acceleration in South America [blog]
- The Evolution of IT Infrastructure — Designing for the Unknown
[analyst report]
About Equinix
Equinix (Nasdaq: EQIX) is the
world's digital infrastructure company, enabling digital leaders to
harness a trusted platform to bring together and interconnect the
foundational infrastructure that powers their
success. Equinix enables today's businesses to access all
the right places, partners and possibilities they need to
accelerate advantage. With Equinix, they can scale with
agility, speed the launch of digital services, deliver world-class
experiences and multiply their value.
Forward-Looking Statements
This press release contains forward-looking statements which are
based on current expectations, forecasts and assumptions that
involve risks and uncertainties that could cause actual results to
differ materially from expectations discussed in such
forward-looking statements, including statements related to the
acquisition of data centers from Entel, including the data center
in Peru which is still pending, the expected benefits
from the acquisition and the expected timing for closing the
Peru acquisition. Factors that
might cause such differences include, but are not limited to, risks
to our business and operating results related to the COVID-19
pandemic, unanticipated costs or difficulties relating to the
integration of data centers or companies we have acquired or will
acquire into Equinix, including the data centers we acquired
from Entel; the challenges of acquiring, operating and constructing
IBX data centers and developing, deploying and
delivering Equinix services, including in the Entel data
centers; a failure to receive significant revenue from customers in
recently built out or acquired data centers, including those
acquired from Entel; competition from existing and new competitors;
the ability to generate sufficient cash flow or otherwise obtain
funds to repay new or outstanding indebtedness; the loss or decline
in business from our key customers; and other risks described from
time to time in Equinix filings with the Securities
and Exchange Commission. In particular, see
recent Equinix quarterly and annual reports filed with
the Securities and Exchange Commission, copies of which are
available upon request from Equinix. Equinix does
not assume any obligation to update the forward-looking information
contained in this press release.
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SOURCE Equinix, Inc.