Increasing data centers through acquisitions
Acquisitions have been a key growth strategy for Equinix (EQIX), which has helped it expand its data center capacity and enter new markets. Over the last three years, the company has almost doubled the size of its business through mergers and acquisitions, bringing the total data center count to 200 on March 31 from 112 at the end of 2015.
Of these, 50 had been added since the beginning of the second quarter 2017, which also increased its global presence in 52 metros from 41 metros. The company’s buyouts are bringing in massive incremental revenues.
Equinix’s expansion strategy has contributed $336.0 million to its first-quarter total revenues of $1.22 billion. For the second quarter, analysts are projecting an ~18.0% YoY growth in revenues to $1.26 billion.
Some notable recent buyouts
Equinix’s latest acquisitions include the buyouts of Metronode and Infomart Dallas together for ~$1.6 billion. Apart from bringing in additional revenues and increasing the number of data centers, the two acquisitions are expected to help strengthen its position in two different markets.
The acquisition of Metronode is expected to help the company penetrate the fast-growing Australian and Asia-Pacific regions. The Asia-Pacific region contributes 21% to Equinix’s total revenues.
On the other hand, Infomart Dallas is expected to solidify its position in the Latin American market/ According to Equinix, this region should be the fastest-growing region for Interconnection Bandwidth through 2020. The two acquisitions are expected to add $18 million to its second-quarter total revenues.
Equinix acquired data center assets from companies such as Zenium, Itconic, IO UK, and ICT-Center AG. In 2017, Equinix also completed the acquisition of 29 data center assets of Verizon Communications (VZ). All these acquisitions are expected to contribute to Equinix’s second-quarter revenues. For 2018, the company had planned to incur non-recurring capital expenditures of $1.8 billion–$1.9 billion.