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>>> Equinix Completes 13 Data Center Buyouts, Expands in Canada


Zacks

October 5, 2020


https://finance.yahoo.com/news/equinix-completes-13-data-center-142302411.html


Equinix, Inc. EQIX announced the completion of the previously-announced acquisition of a portfolio of 13 data centers across Canada from BCE Inc. ("Bell") for $780 million.

The all-cash transaction is immediately accretive to the company’s adjusted funds from operations (“AFFO”) per share (excluding integration costs). Moreover, the assets are anticipated to generate $112 million in annualized revenues.

The data centers will add 1.2 million gross square feet of space and more than 600 customers, of which 500 are new ones.

Other than strengthening relationships with customers, the acquisition solidifies Equinix's position as a preeminent digital infrastructure provider in Canada. In fact, with the newest capacity addition through the buyout, the company’s expanded portfolio consists of 15 high-quality International Business Exchange (“IBX”) data centers throughout Canada.

Additionally, under the terms of the agreement, Equinix and Bell will start a partnership, leveraging on the combined ecosystem of both parties. The joint offering will bring together Bell's telecommunications services and technology expertise with Equinix's global, interconnected data-centers platform and rich business ecosystems. This offers global expansion opportunities to local businesses and the scope for multinational corporations to pursue growth and innovation in the Canada market.

Moreover, it will accelerate enterprises to shift from traditional to digital businesses, providing rapid scaling of infrastructure as well as the seamless adoption of hybrid multi-cloud architectures. The spending on digital transformation in Canada is projected to grow in the near term, thereby, increasing the reliance on data centers. Hence, the buyout is a strategic fit.

Notably, as people are working remotely and maintaining stringent social distancing measures, cloud businesses have been gaining popularity and emerged as a key technology to fight the battle against the coronavirus outbreak. This along with the increasing need for digital transformation positions data centers well to benefit from the rising reliance on technology. Thus, data-center REITs like Equinix, Digital Realty Trust DLR, CyrusOne Inc. CONE and CoreSite Realty Corporation COR will keep witnessing significant demand.

Hence, Equinix’s global-expansion strategy, and focus on enhancing cloud and network density bode well. Although such moves are a strategic fit, integration costs related to acquisitions will likely impede the company’s bottom-line growth.

Shares of Equinix have rallied 34.7% as against the real estate market’s decline of 12% over the past year.

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