Equinix (EQIX) Fortifies Mexico Portfolio With $175M Buyout
Zacks Investment Research | Oct 08, 2019 09:38PM ET
Equinix, Inc. (NASDAQ:EQIX) recently entered into an all-cash transaction agreement with Mexican telecom firm — Axtel S.A.B. de C.V. — to acquire three data centers that cater the Mexico City and Monterrey metro areas of Mexico, for US$175 million.
The deal, likely to close in first-quarter 2020, is subject to customary closing norms, including regulatory approvals.
Despite this positive development, shares of the company have declined around 1.1% since the buyout was announced. This depreciation is largely due to the prevailing broader market concerns.
All three facilities are carrier-neutral data centers. The two data centers serving the Mexico City metro region are strategically situated in Querétaro, while the third one is located in Monterrey area.
Specifically, the first facility spans 110,000 square feet of gross space and offers 37,000 square feet of colocation space. It is also the first Latin-American data center with an energy cogeneration system. Moreover, the second facility is an 80,000-gross-square-foot data center, offering 6,000 square feet of colocation space. The facility has the ability to expand and offer up to 60,000 square feet of colocation space. Both facilities offer multiple diverse fiber entry points and include five network service providers that are presently operating in each data center.
The third property in the Monterrey area offers 25,000 square feet of gross data-center space and 12,500 square feet of colocation space featuring 10 network service providers. This facility is a well- connected data center, offering a key interconnection gateway between the United States and Mexico.
The addition of these facilities will expand Equinix’s global portfolio, further fortifying its presence in Latin America’s second-largest economy. In fact, it will increase colocation space at Equinix’s International Business Exchange (IBX) data-center portfolio by 115,000 square feet and strengthen interconnection between North, Central and South America.
In addition, the facilities generated nearly $21 million of revenues in 2018 and the EBITDA margin profile is anticipated to be accretive to the Equinix business.
Furthermore, over the past three months, shares of this Zacks Rank #3 (Hold) company have rallied 8%, outperforming the real estate market’s growth of 1.7%. You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.