Equinix acquires five data centers in South America

Digital infrastructure company Equinix has expanded its Equinix platform in Latin America following the acquisition of four data centers in Chile from Entel, a telecommunications provider.

Equinix has also acquired an additional data center in Peru, also from Entel.

Equinix estimates the value of the five data centers to be approximately US$735 million ($1 billion) at current exchange rates in effect at the dates of signing.

Equinix and Entel have partnered to enable enterprises to leverage hybrid multi-cloud solutions to accelerate their digital transformation.

Equinix highlights the following:
The addition of the five data centers is expected to increase Equinix’s adjusted funds from operations (AFFO) per share at closing, excluding integration costs. The five facilities generate approximately $55 million in annualized revenue and represent a purchase multiple of approximately 23x EV / Adjusted EBITDA 2021, including Equinix’s SG&A expenses.

Chile is the fourth economy in South America with the highest GDP per capita in the region. Santiago is becoming a technology hub in South America, serving both regional demand for cloud and content, as well as local businesses.

Santiago Metro’s four data centers include:
1. La Ciudad de los Valles, which includes two data centers with approximately 170,000 combined gross square feet, and is the largest multi-tenant data center site in Santiago, with ample room for expansion.
2. The downtown Santiago site, which comprises 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 center of the city’s government.
3. The approximately 31,000 gross square foot facility in Longovilo, which is 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 located in Lima.

Under the terms of the agreement, approximately 100 Entel employees and contractors are expected to become Equinix employees or contractors.

More than 100 Entel customers currently operating across the four data centers will become Equinix customers, of which more than 75 represent net new customers. Acquired customers include more than 20 network service providers (NSPs) and a strong financial services ecosystem.

By expanding its platform to the Southern Hemisphere, Equinix will expand its presence to five Latin American countries, including Brazil, Chile, Colombia, Mexico and Peru, operating 16 IBX data centers in seven metros.

Equinix plans to introduce interconnect and digital services across all four data centers in Chile, including Equinix Fabric, Network Edge, Equinix Internet Exchange, Equinix Internet Access and Metro Connect upon integration.

This will allow Chilean customers to connect in real time, directly and privately, to more than 10,000 enterprises, including more than 2,000 networks and 3,000 cloud and IT service providers, via Platform Equinix for performance, security and increased scalability.

Chile also has access to non-conventional renewable energies (NCRE) such as solar, hydro and wind power, which not only offset the operating costs of data centers, but contribute significantly to carbon neutrality.

Citi served as exclusive financial advisor to Equinix on this transaction.

“We continue to see demand from Latin American businesses, across all industries, 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 expand digital access for our customers globally. Chile’s access to sustainable energy sources such as solar, hydro and wind power helps our customers in the region, and the multinationals that do business with them, grow responsibly and sustainably, which aligns with our global sustainability strategy,” concludes Tara Risser, President of Equinix for the Americas.

This first appeared in the CommsWire subscription newsletter on May 5, 2022.

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