Equinix has made a public offering of $1.25 billion of its common stock to raise money for a major acquisition. An investor report suggests the target may be facilities belonging to a Canadian telco.
As well the $1.25bn, the data center giant says an additional $187.5m in stock is also up for grabs for underwriters. Naturally, the offering is still subject to market conditions. Morgan Stanley, Goldman Sachs & Co, Bank of America Securities, Citigroup and J.P. Morgan are acting as joint book-running managers and representatives of the underwriters for the offering.
Equinix has not named the target of its acquisition, but an investor report by Wall Street group Cowen, suggests it wants to buy data centers belonging to BCE, Canada's largest telecoms company. BCE operates a portfolio of around 28 data centers, and the report, cited by Light Reading, suggests Equinix wants to take 17 of them.
If the deal fails to complete, Equinix says it intends to use all of the net proceeds from the offering for general purposes such as paying off debts and improving its liquidity.
This is hardly the first time a telco has proceeded to sell off its data centers. Large telecoms companies including AT&T, Verizon and CenturyLink in the US, Telefonica in Europe and Tata in India bought into the data center sector early in the 2010s, and gradually pulled out of owning the assets later in the decade In January this year, Equinix finalized the $175m acquisition of three data centers in Mexico previously owned by Axtel and previously, in 2016. Equinix bought 29 facilities from Verizon for $3.6bn.
Also this month, Equinix announced continued profits, with revenue up six percent in Q1 to $1.4 billion, marking its 69th consecutive quarter of growth. During the earning call, Equinix CEO Charles Meyers made a point of name-checking a currently hot customer: along with AWS and Oracle, Equinix apparently has an expanding business relationship with teleconferencing provider Zoom.