Equinix is greatly expanding its presence in Canada, going from footprint in only one metro north of the US border to eight.
The Redwood City, California-based colocation giant has agreed to pay US$750 million to take 13 data centers off the hands of BCE, the massive telecommunications and media conglomerate, corporate parent of Bell MTS and Bell Canada.
About 600 companies hosting their technical infrastructure in the Bell data centers across 13 sites will become Equinix customers, 500 of them net new for the buyer, Equinix said in a statement Monday. It expects to close the transaction sometime in the second half of 2020.
The novel coronavirus pandemic has had minimal impact on Equinix’s financial performance in the first quarter, and executives said they expected to continue reporting strong results throughout the rest of the year. The Bell data center deal demonstrates that at least for now Equinix, the world’s largest data center provider by revenue, isn’t retrenching or slowing expansion in the face of the global economic downturn and uncertainty caused by the crisis. The announcement comes three months after it closed acquisition of Packet, a bare-metal cloud and edge computing startup, using its technology to expand into bare-metal cloud services.
The deal continues a multi-year trend of record M&A activity in the data center provider market. While the value of individual deals has gone down substantially in the last two years (there aren’t many big multi-billion data center portfolios left on the market), the number of deals continues growing. More deals were struck in the first quarter of 2020 alone than in all of 2019 – which was a record year in terms of the number of deals, according to Synergy Research Group.
If and when it closes the BCE data center acquisition, Equinix expects it to add $105 million in annualized revenue. It intends to grow that revenue over time by bringing its software-defined interconnection platform to the 13 Canadian sites, providing “integrated networking and hybrid multi-cloud services” to customers through a partnership with Bell, and using the footprint as a platform for future expansion of its business across Canada.
Besides adding capacity to its existing footprint in Toronto, the portfolio (400,000 square feet of data center space total) will give Equinix instant presence in new metros, including Calgary, Alberta; Kamloops and Vancouver, British Columbia; Millidgeville, New Brunswick; Montreal, Quebec; Ottawa, Ontario; and Winnipeg, Manitoba.
Equinix currently operates about 210 data centers in 55 metros worldwide.