Equinix targets US$320m acquisition of West Africa's MainOne
Global digital infrastructure company Equinix, Inc. is gearing up to expand in Africa after announcing its intended US$320-million acquisition of West African datacentre and connectivity solutions provider MainOne.
MainOne has presence in Nigeria, Ghana and Côte d’Ivoire and in a statement, Equinox confirmed the deal is expected to close Q1 of 2022, subject to the satisfaction of customary closing conditions including the requisite regulatory approvals.
According to a statement released to the media, the transaction d is expected to be AFFO accretive upon close, excluding integration costs, marking the first step in Equinix’s long-term strategy to become a leading African carrier neutral digital infrastructure company.
With more than 200 million people, Nigeria is Africa’s largest economy and, along with Ghana, has become an established datacentre hub. This makes the acquisition a pivotal entry point for Equinix into the continent.
Equinix believes MainOne to be one of the most exciting technology businesses to emerge from Africa.
Founded by Funke Opeke in 2010, the company has enabled connectivity for the business community of Nigeria and now has digital infrastructure assets including three operational datacentres, with an additional facility under construction expected to open in Q1 2022.
Upon closing, these facilities will add more than 64,000 gross square feet of space to Platform Equinix, with 570,000 square feet of land for future expansions.
MainOne owns and operates a subsea network from Nigeria to Portugal, as well as 1,200 kilometers of reliable terrestrial fibre network across southern Nigeria.
According to the companies, this acquisition will extend Platform Equinix into West Africa, “giving organisations based inside and outside of Africa access to one of the world’s fastest growing markets.”
Charles Meyers, President and CEO, Equinix: “The acquisition of MainOne will represent a critical point of entry for Platform Equinix into the expansive and rapidly growing African market. MainOne’s leading interconnection position and experienced management team represent critical assets in our aspirations to be the leading neutral provider of digital infrastructure in Africa. Growth of data consumption in Africa is amongst the fastest in the world, and our customers are looking for a trusted partner to pursue the opportunities presented by broad mobile adoption and greater connectivity across the region. MainOne’s infrastructure, customer relationships, partner ecosystem and operating capability will extend the reach of Platform Equinix and bolster opportunities for customers in Africa and throughout the world.”
Under the terms of the transaction, the management team, including CEO Funke Opeke, will continue to serve in their respective roles.
The companies underline potential assets and opportunities related to the deal, including access to key internet exchanges enabling low latency to key global networks, including Amazon, Microsoft, Apple, Google and Facebook; as well as an estimated 800+ business-to-business customers, including major international technology enterprises, social media companies, global telecommunications operators, financial service companies and cloud service providers.
The facilities generate approximately US$60m annualised (Q2’21LQA) revenue with a purchase multiple of approximately 14x EBITDA.
Globally, Platform Equinix is comprised of 237 datacentres across 65 metros and 27 countries, providing datacentre and interconnection services for over 10,000 businesses.
John Dinsdale, Chief Analyst & Research Director, Synergy Research Group, said, “Africa has been the missing piece in the Equinix jigsaw, and this acquisition of MainOne will be a great first step onto the continent. The demand for datacentre services in Africa is strong, with Nigeria at the epicentre of exponential economic growth in West Africa. Nigeria is Africa’s largest country by both population and economy, and its growth drivers include rapid mobile adoption, increased data consumption from its young population, good sub-sea and terrestrial connectivity, and a strong enterprise market. This is advancing the region toward a more digitalised economy and driving datacentre growth and expansion to provide much-needed digital infrastructure.”
Opeke added: “Equinix will accelerate our long-term vision to grow digital infrastructure investments across Africa. I thank our founding shareholders led by Mr. Fola Adeola, MainStreet Technologies, AFC, PAIDF, FBN, Polaris and AfDB for investing in the MainOne vision to bridge the Digital Divide in Africa. With similar values and culture to what we have jointly built in twelve years, Equinix is the preferred partner for our growth journey. The MainOne team is excited about the partnership created through the acquisition, and we look forward to building our next chapter together.”
Eugene Bergen, President, EMEA, Equinix: “Expansion in Africa has long been a strategic priority for us. With MainOne, we have found a company that not only has highly complementary datacentre and connectivity assets, but can further accelerate the expansion of our business model and growth objectives. CEO Funke Opeke and her team have built a powerful and dynamic infrastructure that will enable international customers access to the continent and African organisations access to the global Equinix platform.”