Equinix Acquires Four Entel Data Centers for $705M in Chile and Peru

Global colocation and interconnection provider Equinix has announced its intention to expand into Chile and Peru by purchasing four data centers from Chilean telecommunications provide, Empresa Nacional De Telecomunicaciones (Entel). The deal is estimated at around $705 million.

Three data centers in Chile are included in the deal, and one data center in Peru might be added pending the completion of a definitive agreement. The deal is scheduled to completion in Q2 2022, subject to usual closing circumstances.

Photo Charles Meyers, President and CEO at Equinix
“With this expansion, we’re broadening digital access and accelerating digital transformation across Latin America,” said Charles Meyers, President and CEO at Equinix.

Chile is South America’s fourth-largest economy, having the region’s highest GDP per capita. Santiago is establishing itself as a South American technological powerhouse, catering to both regional cloud and content demand as well as local businesses. According to IDC, Latin America’s enterprise edge expenditure is predicted to reach $8.573 billion by 2024, with double-digit growth in Chile over that time. Furthermore, IDC forecasts a 34.6 percent growth in cloud investment in Chile between 2020 and 2024.

Equinix’s coverage in this critical market will be expanded as a result of the acquisition, which would reinforce Equinix’s position as a regional provider of digital infrastructure services.

The deal would provide considerable expansion potential for future development in Santiago, Chile, with three data center locations, allowing Equinix to support both immediate and future growth in the region. Equinix and Entel have agreed to develop a strategic collaboration to enable organizations in Chile and Peru to use hybrid multicloud solutions to speed their digital transformation, according to the conditions of the agreement.

“Latin America holds enormous potential, and our commitment to the region has exponentially grown since we entered back in 2011,” said Charles Meyers, President and CEO at Equinix. “Chilean, Peruvian and multinational companies are thirsting for the digital infrastructure required to thrive in today’s economy. With this expansion, we’re broadening digital access and accelerating digital transformation across Latin America, while supporting growth in a responsible and sustainable manner.”

$53M in Annual Revenue

The three data centers in Chile are all located in the Santiago metropolitan region and have different strategic characteristics:

  • The Ciudad de los Valles facility is Santiago’s largest multitenant data center, with plenty of room for development
  • In a heightened security environment, the downtown Santiago location is a network-dense facility near to the Entel Tower, an important IX facility in the market, and close to the local government center
  • Longovilo’s facility is strategically positioned away from the city core to satisfy financial institutions’ backup and disaster recovery needs
  • Furthermore, the Peruvian data center is a well-established Tier III facility in Lima, Peru’s capital

By expanding its platform to the Southern Cone, Equinix will extend its presence to five countries in Latin America, including Brazil, Chile, Colombia, Mexico and Peru, operating 15 International Business Exchange (IBX) data centers in seven metros. Additionally, the company will be present in all the countries of the Pacific Alliance, a trade block formed by Chile, Colombia, Mexico and Peru that aims to integrate these markets and achieve free mobility of goods, services, resources and people. Since 2011, when Equinix first entered the region, it has invested approximately $1.2 billion in its Latin America operations.

The four data centers produce roughly $53 million in annual revenue and have a 23x EV / 2021 adjusted EBITDA including Equinix SG&A expenditures buy multiple. After integration expenditures, the transaction is estimated to be AFFO per share accretive at closing.

Under the terms of the arrangement, about 120 Entel workers and contractors will become Equinix employees or contractors.

“This strategic partnership with Equinix, a world leading digital infrastructure company, allows us to focus our resources on businesses that add value to our customers,” said Antonio Büchi, Chief Executive Officer (CEO) at Entel. “Entel has transformed over the years, and this partnership, which is more than an infrastructure transaction, is intended to set an important milestone in our strategic plan to extend our offerings into delivering digital services and provide expertise with new solutions that will accelerate our client’s digital transformation.”