Equinix (EQIX) to Buy $750M Data-Center Portfolio From BCE
Equinix, Inc. EQIX announced a deal to acquire a portfolio of 13 data centers across Canada from BCE Inc. ("Bell") for $750 million.
Subject to customary closing norms, the all-cash transaction is expected to close in the second half of 2020.
Upon closing, it will be immediately accretive to the company’s adjusted funds from operations (AFFO) per share (excluding integration costs). Moreover, the assets are anticipated to generate around $105 million in annualized revenues.
The data centers will add around 1.2 million gross square feet of space and 400,000 square feet of colocation space to Platform Equinix.
Additionally, under the terms of the agreement, Equinix and Bell will start a partnership, leveraging on the combined ecosystem of both parties. The joint offering will bring together Bell's telecommunications services and technology expertise with Equinix's global, interconnected data-centers platform and rich business ecosystems. This will help the partnership to provide integrated networking and hybrid multi-cloud solutions to accelerate digital adoption.
The additions of the strategic assets will drive interconnection within Canada and between Canada and the rest of the world. This offers global expansion opportunities to local businesses and the scope for multinational corporations to pursue growth and innovation in the Canada market.
Moreover, it will accelerate enterprises to shift from traditional to digital businesses, providing rapid scaling of infrastructure as well as the seamless adoption of hybrid multi-cloud architectures. It will also open doors for interconnecting with strategic business partners within the Platform Equinix ecosystem that consists of around 10,000 customers.
Notably, the company’s existing footprint in Toronto, Ontario, consists of two operating International Business Exchange (IBX) data centers. Adding new capacity through the buyout will strengthen Equinix’s asset coverage throughout Canada and extend its interconnection services to seven new metros. Including Calgary, Alberta; Millidgeville, New Brunswick; Kamloops and Vancouver, British Columbia; Montreal, Quebec; Ottawa, Ontario and Winnipeg, Manitoba.
Moreover, shares of the Zacks Rank #3 (Hold) company have surged 46.3% over the past year as against the real estate market’s decline of 12.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Alexander Baldwin Holdings, Inc.’s ALEX Zacks Consensus Estimate for 2020 FFO per share has remained unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1.
One Liberty Properties, Inc.’s OLP FFO per share estimate for the ongoing year has been unchanged at $1.89 over the past 30 days. The company currently flaunts a Zacks Rank of 1.
Gladstone Land Corporation’s LAND FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past month. Further, it currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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