Acquisition is first step to Equinix’s long-term strategy to become Africa’s top digital infraCo
The $320 million acquisition programme of MainOne, the Nigerian data centre technology company founded by Funke Opeke, by United States based Equinix Incorporated, a world’s digital infrastructure company, is scheduled to be concluded in the first quarter of 2022.
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The acquisition process is currently ongoing although it is now clear that all parties directly involved in the exercise have agreed valuation and terms and now have to subject the programme to relevant regulatory entities in both jurisdictions, businessamlive.com further learnt as the deal announcement became available Tuesday.
Equinix had earlier stated that the transaction was subject to the satisfaction of customary closing conditions, including the requisite regulatory approvals.
The $320 million is expected to be adjusted fund from operations (AFFO) accretive upon close, excluding integration costs, marking the first step in Equinix’s long-term strategy to become a leading African carrier of neutral digital infrastructure company. Equinix believes MainOne to be one of the most exciting technology businesses to emerge from Africa.
Founded by Funke Opeke in 2010, MainOne is a leading West African data centre and connectivity solutions provider with a presence in Nigeria, Ghana and Côte d’Ivoire. It has enabled connectivity for the business community of Nigeria and now has digital infrastructure assets, including three operational data centres, with an additional facility under construction expected to open in Q1 2022.
Next year when the Equinix acquisition closes facilities from MainOne will add more than 64,000 gross square feet of space to Platform Equinix, with 570,000 square feet of land for future expansions.
Meanwhile, MainOne owns and operates a subsea network from Nigeria to Portugal, as well as 1,200 kilometres of reliable terrestrial fibre networks across southern Nigeria and are all improving connectivity to and from Europe, West African countries and the major business communities in Nigeria. But, these facilities generate an approximately $60 million annualized revenue with a purchase multiple of approximately 14x earnings before interest tax depreciation and amortisation (EBITDA).
Charles Meyers, president and chief executive officer, Equinix, said: “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 and 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.”
Funke Opeke, MainOne founder and chief executive officer, in her comments said: “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.”
MainOne noted that the transaction, “When completed … 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,” while adding that under the terms of the transaction, the management team, including CEO Funke Opeke, will continue to serve in their respective roles.
Eugene Bergen, president, EMEA, Equinix, said, “Expansion in Africa has long been a strategic priority for us. With MainOne, we have found a company that not only has a highly complementary data centre and connectivity assets but can further accelerate the expansion of our business model and growth objectives. Customers can take full advantage of Equinix’s leading global interconnection services to connect with customers and partners, participate in rich digital ecosystems and expand their business across Africa and around the world.”
John Dinsdale, chief analyst and 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 data centre services in Africa is strong, with Nigeria at the epicenter 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 subsea and terrestrial connectivity, and a strong enterprise market. This is advancing the region toward a more digitalised economy and driving data centre growth and expansion to provide much-needed digital infrastructure.”