Equinix is expanding its operations in the Great White North through the purchase of 13 data centers from Bell Canada. The all-cash transaction cost US$740 million. The deal's valuation is roughly 15x EV (enterprise value)/adjusted EBITDA.
This is M&A deal number 231 that ChannelE2E has covered so far in 2020. See the complete M&A deal list here.
The 13 data center sites are spread across Canada and are expected to generate approximately $105 million in annualized revenue. The acquisition is expected to close in the second half of 2020, assuming regulatory approval and other customer closing conditions are met.
Equinix Expands Canadian Data Center Footprint
In addition to adding new capacity in Toronto, Ontario, where Equinix currently operates two data centers, it will extend Equinix's interconnection services to seven new cities including Calgary, Alberta; Kamloops and Vancouver, British Columbia; Millidgeville, New Brunswick; Montreal, Quebec; Ottawa, Ontario; and Winnipeg, Manitoba.
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, the company said. They will be added to Equinix’s more-than 210 data centers spread throughout 55 metro areas.
As part of the deal, Equinix and Bell – a Canadian telecom giant – will begin a strategic partnership to market hybrid multicloud solutions to enterprises, the company said. 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, Equinix announced. The acquired customers comprise a diversity of sectors and segments, including enterprise, cloud and IT, government, and financial services.
Equinix Data Center Deal: Executive Perspectives
In a prepared statement about the deal, Charles Meyers, president and CEO, Equinix, commented:
"Canadian businesses are in the midst of a significant transformation as they evolve their operations to be increasingly digital and cloud-enabled. With a platform that enables companies to increase the scale, reach and connectivity of their growing digital businesses, Equinix provides a compelling vision for businesses to rapidly and broadly interconnect with the people, locations, cloud services and data that matter most to their business. This expansion is a significant win for Canadian businesses, as well as for multinational companies that can leverage Platform Equinix to increase their digital presence in Canada by interconnecting to a rich ecosystem of customers, business partners and other strategic companies in Canada."
Tom Little, president, Bell Business Markets, added:
"Our partnership with Equinix will further accelerate digital transformation opportunities for Canadian enterprise customers, combining access to Equinix's interconnected global data centre platform with Bell's advanced broadband network connections, wide range of cloud solutions and experienced professional services team."