Equinix Completes $175m Acquisition Of Mexico Data Centres

Equinix completes $175m acquisition of Mexico data centres

09 January 2020 | Jason McGee-Abe

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Equinix has today announced the completion of its acquisition of three data centres from Axtel that serve the Mexico City and Monterrey metro areas of Mexico.

The global interconnection and data centre company entered into an all-cash agreement with Axtel in October. The deal expands the reach of Equinix’s global platform to two new metros, as businesses increasingly seek to move their IT operations and latency-sensitive data to the digital edge, closer to where content is created and consumed.

"The addition of these three facilities in two strategic technology metros in Mexico will enable current and future customers to operate on an expanded global interconnection platform to process, store and distribute larger volumes of latency-sensitive data and applications at the digital edge, closer to end users and local markets,” said Jon Lin, president of the Americas at Equinix (pictured), who was appointed in June 2019.

“It will also enable Equinix to enrich its ecosystem of nearly 10,000 customers that come to Equinix to directly connect to each other within a secure, private and proximate environment."

This expansion, when combined with previous Equinix acquisitions of key regional traffic hubs in Dallas (Infomart) and Miami (NAP of the Americas), will further strengthen Equinix's global platform by increasing interconnection between North, Central and South America. It will support the important role Equinix plays in helping companies evolve from traditional businesses to digital businesses by globally interconnecting the people, locations, cloud services and data that are critical to their operations.

Dan Thompson, research director at 451 Research, said: "As Latin America is forecasted to be the fastest-growing region for colocation services over the next five years, this acquisition positions Equinix well to businesses seeking to expand and build out their IT infrastructure at key edge metros within the region. The three new data centres in Mexico will add to the Equinix presence in Brazil and Colombia, along with its operations in the north-south interconnection points in Miami and Dallas."

The three data centres will add approximately 115,000 sq ft of colocation space to the Equinix International Business Exchange (IBX) data centre portfolio. Given the power capacity of these three sites, this transaction will make Equinix one of the largest network-neutral data centre operators in Mexico. Including current expansion projects, Equinix has invested more than $500 million in its Latin American operations including Brazil, Colombia and now Mexico.

In early 2019, Equinix announced it would extend the digital edge by spending nearly $2 billion to open 12 new International Business Exchange (IBX) data centres and expand 23 existing IBX data centres in 2019. Today, Equinix operates more than 200 IBX data centres in 55 markets, providing customers even more ways to connect with other businesses around the world on Platform Equinix.

Equinix believes there is uncaptured market demand in the region for interconnection and data centre services if bandwidth requirements and end-user demand continue to increase as expected. The two data centres that serve the Mexico City metro are strategically located in Querétaro. Both are carrier-neutral facilities with multiple diverse fibre entry points that include five network service providers currently operating within each data centre.

The Monterrey area facility, which is a carrier-neutral facility with 10 network service providers, is a highly connected data centre offering a key connectivity gateway between the US and Mexico. This facility has been renamed the Equinix MO1 IBX data centre.

Equinix plans to offer Equinix Cloud Exchange Fabric (ECX Fabric) in all three data centres. ECX Fabric is an on-demand, software-defined networking (SDN)-enabled interconnection service that allows any business to connect between its own distributed infrastructure and any other company's distributed infrastructure, including the world's largest network service and cloud providers, on Platform Equinix.

Commenting on the completion, Héctor Nava Cortinas, CEO of Totalplay Empresarial, said: "We live in a digital age where everything and everyone are increasingly connected. The growing amount of data, combined with advances in mobile communications, is increasing the need for users to have continuous access to information and content. For Totalplay Empresarial, it is essential to provide the best possible experience for our customers. Equinix is a trusted partner in delivering our services in the United States and Colombia, providing unique interconnection services. Now with its expansion to Mexico, we look forward to extending our operations further on Equinix's global platform."

The three facilities generated approximately $21 million of revenues in the 12 months ending December 31, 2018, with an EBITDA margin profile accretive to the Equinix business. Approximately 40 Axtel employees and contractors, primarily in the operations functions of the acquired facilities, will become Equinix employees or contractors.