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Equinix (EQIX) Wraps Up $175M Buyout of 3 Mexican Data Centers

Zacks Equity Research

Equinix, Inc. EQIX recently wrapped up the previously-announced acquisition of three data centers from Axtel S.A.B. de C.V.  that cater the Mexico City and Monterrey metro areas of Mexico. The company has shelled out $175 million for this buyout, making it one of the largest network-neutral data center operators in Mexico.

In fact, the three new data centers will add roughly 115,000 square feet of colocation space to Equinix’s International Business Exchange (IBX) data-center portfolio. 

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 the Monterrey area.

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. The second facility is an 80,000-gross-square-foot data center, offering 6,000 square feet of colocation space. This 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 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 inter-connection gateway between the United States and Mexico.

In addition, the facilities generated nearly $21 million of revenues in 2018 and the EBITDA margin profile is anticipated to be accretive to Equinix’s business.

Notably, Latin America’s inter-connection bandwidth is projected to witness a 63% compound annual growth rate (CAGR) by 2022. To benefit from this, the company has been strengthening its footprint and has invested more than $500 million in the region. Such strategic moves bode well for long-term growth.

Over the past three months, shares of this Zacks Rank #3 (Hold) company have rallied 3.9%, as against the real estate market’s decline of 1.2%.


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