Equinix (EQIX) Closes $800M Infomart Dallas Acquisition
Zacks Investment Research | Apr 03, 2018 09:13PM ET
Equinix, Inc. (NASDAQ:EQIX) recently completed the acquisition of the Infomart Dallas from ASB Real Estate Investments in an $800-million cash-debt transaction. This move is in sync with the company’s effort to expand in the region. Further, it offers scope to capitalize on the solid growth potential of the Latin America market in terms of Interconnection Bandwidth.
The buyout seems a strategic fit for Equinix. Specifically, the acquisition has enhanced the company’s portfolio with around 1.6 million gross square feet of space. It includes multiple diverse fiber entry points. Also, the company gained from the addition of more than 50 tenants, including networks, colocation providers and office tenants.
Around $50 million of revenues were generated by the Infomart building in 2017. One year from closing, Equinix estimates this transaction to be adjusted funds from operations (AFFO) per share breakeven. In addition, future development of the adjacent acquired land parcel offers significant AFFO upside potential.
In fact, Equinix’s global platform gets a boost with the acquisition of Infomart, which is one of the largest inter-connection hubs in the United States. It currently houses four of eight Equinix Dallas International Business Exchange data centers.
Moreover, the Dallas market has been experiencing sizable growth with solid demand stemming from a rising number of enterprises across different verticals setting their regional or national headquarters in the region.
Furthermore, according to the company, Dallas serves as a key interconnection point for LATAM traffic, with routes serving Central and South America. Therefore, with LATAM predicted to be the fastest growing region in terms of Interconnection Bandwidth through 2020, per the Equinix published Zacks Investment Research
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