Global colocation giant Equinix will buy a portfolio of 13 data center sites from Bell Canada (BCE) for $750 million in cash, the companies said today.
The deal will boost Equinix’ colocation footprint in Canada, adding 1.2 million gross square feet of data center space and 400,000 square feet of colocation space across 25 faciliites in the 13 markets.
“The acquisition of these 13 strategic assets further extends the depth and breadth of Equinix’s global platform,” said Jon Lin, President, Americas for Equinix. “It will position Equinix as a market leader for data center and interconnection services in Canada, with high-quality assets from coast to coast and a large, diversified ecosystem of Canadian businesses.
“Additionally, it opens key gateways for North America to Asia through Vancouver and North America to Europe through the submarine cable systems in the Millidgeville area” near St. John in New Brunswick in Eastern Canada.
The transaction had been anticipated since May 11, when Equinix said it was in “advanced discussions” to buy a portfolio of data centers, and announced plans to sell $1.25 billion in stock to fund the deal
A Moment of Opportunity
The announcement comes amid an accelerated merger and financing environment created by the COVID-19 pandemic, as some companies seek to rapidly complete deals in progress, while others line up financing to ride out the jarring business disruption from lockdowns. Still other companies are weighting opportunistic acquisitions, as some providers contemplate exit strategies in a changed investment landscape.
Equinix sees this as a moment of opportunity among surging demand for network capacity, driven by the massive societal shift to online services during the COVID-19 pandemic.
The deal is similar to a 2016 acquisition in which Equinix bought 24 data centers from Verizon fr $3.6 billion. In both transactions, Equinix has expanded by purchasing a portfolio from a telecom provider that is more interested in selling cloud and interconnection services than being a data center landlord.
By buying Bell Canada’s data centers, Equinix will add more than 600 customers (including 500 new logos) and boost the reach of a global platform which currently includes more than 210 data centers across 55 metros. Under the terms of the agreement, Equinix and Bell will begin a strategic partnership to enable enterprises in Canada to leverage hybrid multicloud solutions to accelerate their digital transformation.
“Our partnership with Equinix will further accelerate digital transformation opportunities for Canadian enterprise customers, combining access to Equinix’s interconnected global data centre platform with Bell’s advanced broadband network connections, wide range of cloud solutions and experienced professional services team,” said Tom Little, President, Bell Business Markets.
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“Canadian businesses are in the midst of a significant transformation as they evolve their operations to be increasingly digital and cloud-enabled,” said Charles Meyers, President and CEO of Equinix. “This expansion is a significant win for Canadian businesses, as well as for multinational companies that can leverage Platform Equinix to increase their digital presence in Canada by interconnecting to a rich ecosystem of customers, business partners and other strategic companies in Canada.
In addition to adding new capacity in Toronto, where Equinix currently operates two data centers, it will extend Equinix’s interconnection services to seven new metros: Calgary, Alberta; Kamloops and Vancouver, British Columbia; Millidgeville, New Brunswick; Montreal, Quebec; Ottawa, Ontario; and Winnipeg, Manitoba.