Publishing Date: Mar 18, 2022

Datacentres for better security

Share this news


PRESS RELEASE: Equinix has announced its planned expansion into Chile and Peru through its intended acquisition of four data centres from Entel, Empresa Nacional De Telecomunicaciones S.A., for an enterprise value of approximately US$705 million. The acquisition is expected to close in Q2 of 2022, subject to the satisfaction of customary closing conditions, and is expected to be immediately accretive to Equinix's adjusted funds from operations (AFFO) per share upon close, excluding integration costs. The transaction includes three data centres in Chile; the transaction may also include one data centre in Peru pending finalisation of a definitive agreement.

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. According to IDC, enterprise edge spending in Latin America is expected to reach $8.573 billion by 2024, and in Chile it is anticipated to grow by double digits in the same period. Furthermore, between 2020 and 2024, IDC anticipates that cloud spending in Chile will increase 34.6%.

When closed, the transaction will expand Equinix's coverage in this strategic market, solidifying its leadership as the top regional provider of digital infrastructure services. With three data centre sites in Santiago, Chile, the transaction also includes significant expansion capacity for future growth in Santiago, allowing Equinix to support both immediate and future growth in the region. Under the terms of the agreement, Equinix and Entel have agreed to form a strategic partnership to enable enterprises in Chile and Peru to leverage hybrid multicloud solutions to accelerate their digital transformation.

“Latin America holds enormous potential, and our commitment to the region has exponentially grown since we entered back in 2011,” said Charles Meyers, President and CEO, Equinix. “Chilean, Peruvian and multinational companies are thirsting for the digital infrastructure required to thrive in today's economy; with today's expansion, we're broadening digital access and accelerating digital transformation across Latin America, while supporting growth in a responsible and sustainable manner.” – Charles Meyers, President and CEO at Equinix

Key facts

  • The four facilities generate approximately US$53 million of annualised revenue and represent a purchase multiple of approximately 23x EV / 2021 adjusted EBITDA including Equinix SG&A expenses. The acquisition is expected to be AFFO per share accretive upon close, excluding integration costs.
  • Approximately 120 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 centres 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.
  • The three data centres in Chile are located in the metropolitan area of Santiago and have different strategic characteristics.
  • The Ciudad de los Valles location is the largest multitenant data centre in Santiago, with ample expansion opportunities.
  • The downtown Santiago site is a network-dense facility, adjacent to the Entel Tower, a key IX facility in the market, and close to the city government centre, within a heightened security environment.
  • The facility in Longovilo is strategically located away from the city centre to meet the backup and disaster recovery needs from financial institutions.
  • In addition, the Peruvian data centre is a well-established Tier III site located in Lima, the capital of Peru.
  • Chile also has access to non-conventional renewable energy (NCRE) such as solar, hydro and wind, which not only offsets data centre operating costs but significantly contributes toward carbon neutrality. Access to renewable energy has been a fundamental element of Equinix's long-term sustainability strategy, and further supports our local and international customers' sustainability goals. Equinix is targeting to reach 100% renewable energy by 2030, fulfilling its commitment to RE100.
  • 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 15 International Business Exchange™ (IBX®) data centres in seven metros. Additionally, the company will be present in all the countries of the Pacific Alliance, a trade block formed by Chile, Colombia, Mexico and Peru that aims to integrate these markets and achieve free mobility of goods, services, resources and people. Since 2011, when Equinix first entered the region, it has invested approximately US$1.2 billion in its Latin America operations.
  • Citi served as exclusive financial advisor to Equinix in connection with this transaction.

“This strategic partnership with Equinix, a world leading digital infrastructure company, allows us to focus our resources on businesses that add value to our customers. Entel has transformed over the years, and this partnership, which is more than an infrastructure transaction, is intended to set an important milestone in our strategic plan to extend our offerings into delivering digital services and provide expertise with new solutions that will accelerate our client's digital transformation.” – Antonio Büchi, CEO at Entel

“This is an exciting time for Latin America. The growth Chile and Peru are experiencing is driving and expanding a new set of requirements around data centre and cloud connectivity. With these new sites, businesses in this region as well as multinationals will be able to operate on an expanded global interconnection platform to process, store, interconnect and distribute larger volumes of latency-sensitive data and applications at the digital edge, closer to end users and local markets.” – Jon Lin, Executive Vice President and General Manager, Data Centre Services & President, Americas (Interim) at Equinix


Disclaimer:  DATACENTRE.ME may not be held responsible or liable for the content or details within this news article.

For further information, please refer to the full details of this article via the original source here.

Share this news

Other News