Equinix completes acquisition of MainOne for $320 million

Equinix Incorporated, a multinational and one of the world’s largest digital infrastructure companies, has decided to expand into the African market, with the acquisition of MainOne, a telecommunications service provider for $320 million.

MainOne touts to be West Africa’s leading data center and connectivity solutions provider with presence in Nigeria, Ghana, and Côte d’Ivoire. The firm provides highly reliable services to major telecom operators, ISPs, government agencies, small to large enterprises, and educational institutions.

According to a press release by Equinix, the completion of this acquisition augments Equinix’s long-term strategy to become a leading African carrier-neutral digital infrastructure company by being able to bring a full range of transformative technologies and connectivity to Nigeria, Ghana and Cote d’Ivoire.

Backstory

In December 2021, Equinix announced its plan to acquire MainOne in a bid to expand its operations into the African continent as its long-term strategy has always been to become a leading African carrier neutral digital infrastructure company.

Asides from the goal of becoming a leader in the African continent, Equinix has been going on a spending spree in the last two years to expand its presence all over the world.

Its acquisition of MainOne follows a number of acquisitions made by the multinational, which include the $161 million acquisition of GPX India and the $780 million purchase of 13 data centres from Bell Canada.

What you should know

• The acquisition is expected to extend Equinix’s reach in the African market, giving the organization a base inside and outside of Africa, with access to global and regional markets.
• Equinix is expected to gain from this acquisition as it opens the multinational to a wide market with active customer base. Nigeria, for example, has both the largest population and the largest economy of any country in Africa, with approximately 142 million active internet subscribers.
• Nigeria is also home to new innovative digital ecosystems in fintech, content and digital media, and has great opportunity for expansion of digital services. Due to the fact that MainOne’s headquarters is at the heart of the country, Lagos, the firm stands to generate revenue and ultimately grow from a technologically driven economy.
• The press release disclosed MainOne’s assets, which include four operational data centres, which will add more than 64,000 gross square feet of space to Platform Equinix, in addition to 570,000 square feet of land for future expansions.
• Equinix will also be benefiting from an extensive submarine network extending 7,000 kilometres from Portugal to Lagos, Accra and along the West African coast, with landing stations in Nigeria, Ghana and Côte d’Ivoire.
• Also included in the deal is a terrestrial network of more than 1,200 kilometres of reliable terrestrial fibre in Lagos, Edo and Ogun States. Connectivity to terrestrial sites extends across 65 points of presence (PoPs) in cities across Portugal, Nigeria, Ghana and Cote d’Ivoire.
• Equinix will also be getting MainOne’s estimated 800+ business-to-business customers, which includes major international technology enterprises, social media companies, global telecommunications operators, financial service companies and cloud service providers.
• The press release also revealed that MainOne’s facilities currently generate approximately $60 million annualized (Q2’21LQA) revenue with a purchase multiple of approximately 14x EBITDA.

MainOne was founded by Funke Opeke in 2010 and it has grown to become one of the leading companies in West Africa to have enabled connectivity for the business community in the region, with digital infrastructure assets which include four operational data centres.

Funke Opeke will continue to lead as the CEO of the firm, under the new brand of “MainOne, an Equinix company.”

The acquisition of MainOne marks the latest in a series of strategic acquisitions for the world’s digital infrastructure company.

The news comes after Stripe’s acquisition of PayStack in a $200 million deal in 2020.

Since the announcement, Equinix share price has grown 3.22%. It is however down 9.79% YtD, with a market capitalization of approximately $69 billion.