Equinix to expand into Chile and Peru via $705M acquisition of four Entel data centers
Digital infrastructure company Equinix, Inc. (NASDAQ:EQIX) today announced its planned expansion into Chile and Peru through its intended acquisition of four data centers from Empresa Nacional De Telecomunicaciones S.A. (Entel) 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 centers in Chile; the transaction may also include one data center in Peru pending finalization 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.
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 center 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.”
The four facilities generate approximately US$53 million of annualized 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.