Equinix expands Canadian operations

Equinix, has entered into a definitive agreement to purchase a portfolio of 13 data centers across Canada from BCE Inc. (“Bell”) for US$750 million (CA$1,041 million) in an all-cash transaction.

Tuesday, 2nd June 2020 Posted 4 years ago in by Phil Alsop

The 13 data center sites, which represent 25 Bell data center facilities[1], are expected to generate approximately US$105 million (CA$150 million) annualized revenue (Q4'20E LQA), which represents a purchase multiple of approximately 15x EV / adjusted EBITDA. The acquisition is expected to close in 2H 2020, subject to customary closing conditions including regulatory approval, and it is expected to be immediately accretive to Equinix's adjusted funds from operations (AFFO) per share upon close, excluding integration costs.

The addition of these strategic assets, their associated operations and the more than 600 customers operating within the data centers will further strengthen Equinix’s global platform, which currently includes more than 210 data centers across 55 metros. It will benefit businesses by: increasing interconnection within Canada and between Canada and the rest of the world, opening seven new metros in six provinces to extend the digital edge of Platform Equinix^®, and adding key customers in strategic sectors to further increase the value of the ecosystem available at Equinix. Under the terms of the agreement, Equinix and Bell will begin a strategic partnership to enable enterprises in Canada to leverage hybrid multicloud solutions to accelerate their digital transformation.

The acquisition will expand Equinix’s coverage in Canada coast to coast, making it a market leader in data center and interconnection services. In addition to adding new capacity in Toronto, Ontario, where Equinix currently operates two International Business Exchange™ (IBX^®) data centers, it will extend Equinix’s interconnection services to seven new metros. These metros include Calgary, Alberta; Kamloops and Vancouver, British Columbia; Millidgeville, New Brunswick; Montreal, Quebec; Ottawa, Ontario; and Winnipeg, Manitoba.

Equinix’s expansion across Canada unlocks opportunities for Canadian businesses expanding internationally and for multinational corporations pursuing growth and innovation in the Canadian market. Canadian companies will benefit from the ability to accelerate their evolution from traditional to digital businesses by rapidly scaling their infrastructure, easily adopting hybrid multicloud architectures and interconnecting with strategic business partners within the Platform Equinix ecosystem of nearly 10,000 customers.

Highlights / Key Facts

· Canada is the third largest economy in the Americas, and the 10th largest in the world.[2] It is a high-growth market with a business focus on accelerating cloud adoption, and major cloud players have increased investments in Canada to accommodate this demand.

· The 13 data centers, six of which are owned assets, will add approximately 1.2 million gross square feet of data center space and 400,000 square feet of colocation space to Platform Equinix. The facilities will also provide a platform for future expansion in Canada.

· More than 600 Bell customers currently operating within the 13 data centers will become Equinix customers, with more than 500 of these representing net new customers. The acquired customers comprise a diversity of sectors and segments, including enterprise, cloud and IT, government and financial services.

· The strategic partnership between Equinix and Bell plans to deliver integrated networking and hybrid multicloud services, both directly and through the combined partner ecosystems of the two companies. The joint offering will combine Bell’s telecommunications services and technology expertise with Equinix’s global platform of interconnected data centers and business ecosystems.

· Over time, Equinix plans to introduce Equinix Cloud Exchange Fabric™ (ECX Fabric™) to all 13 data centers. ECX Fabric is an on-demand, SDN-enabled interconnection service that allows any business to connect between its own distributed infrastructure and any other company’s distributed infrastructure, including the world’s largest network service and cloud providers, on Platform Equinix.

· The acquisition of the 13 Bell data centers will further extend Equinix’s ability to provide businesses with the direct and secure connectivity they need to expand their global reach in new and existing markets. According to Volume 3 of the Global Interconnection Index, interconnection is becoming an essential building block of the digital economy. By providing additional interconnection capacity in these key markets, Equinix continues to play an important role in helping companies extend their IT operations to the digital edge through the interconnection of people, locations, clouds and data.