Equinix gets into Africa with $320M MainOne buy

Equinix, the data center company which just marked its 75th consecutive quarter of revenue growth, is rolling into Africa with a chunky $320 million buy of West Africa's data center company MainOne.

Buying MainOne, with a base in Nigeria, Ghana and Côte d'Ivoire, gives Equinix an entry point into an Africa that is currently experiencing a data center boom.

"Growth of data consumption in Africa is amongst the fastest in the world," said Equinix CEO Charles Meyers.

Africa's data center capacity has doubled in the last three years. But it still makes up just 1% of the globe's total data center capacity. Amazon and Microsoft have both invested in data center capacity on the continent in recent years.

Meyers's company, which now has the longest growth run of any S&P 500 company, is building on other recent big buys, which, even before this, had given the company 235 data centers in 27 countries and 65 metro regions.

But "Africa has been the missing piece in the Equinix jigsaw," said John Dinsdale, research director at Synergy Research Group.

"The demand for data center services in Africa is strong" and in Nigeria, "growth drivers include rapid mobile adoption, increased data consumption from its young population, good subsea and terrestrial connectivity, and a strong enterprise market," he says.

You're my MainOne

Funke Opeke founded the company of 500, which has three data centers up and running with a fourth joining it in the first three months of 2022.

MainOne also owns enough land to build another 10 data centers, in Equinix's view.

The company, which has annual revenue of around $60 million, numbers among its customers Google and Facebook. Opeke, who started the company in 2010 after noticing the poor internet connectivity Nigerians had to deal with after he returned from the US, will continue in his post as CEO.

Forbes named her one of the World's Top 50 Women in Tech in 2018. She lived in New York while studying engineering at Columbia University.

The all-cash transaction is expected to close in the first three months of next year, after receiving approval from regulators.

MainOne also has a 7,000 kilometer subsea network it owns and operates, stretching from Portugal to Nigeria, Ghana and Côte d'Ivoire. In addition, it has a smaller terrestrial fiber network that runs 1,200 kilometers around Lagos, Edo and Ogun states.

Equinix that

In other busy buys at the shops, Equinix has also acquired two data centers in India, nabbed 13 Bell data centers in Canada for $780 million and opened a 2Africa subsea cable interconnection hub with Vodafone.

With its $575 million joint venture with PGIM real estate, it's building two Australian data centers in Sydney.

Nasdaq-listed Equinix appears to be looking to these massive footprint grabs to ensure revenue continues to grow – and for the moment, it looks like it might be able to do this.

Its $1.657 billion revenue in the third quarter was up 1% from the previous one.

For the full year, the company is guiding $6.614 - $6.634 billion, which would be an increase of 10-11% over the previous year (8% on a constant currency basis).

Meanwhile, with Equinix stock up 12% this year, giving it a market capitalization of $71.7 billion, MainOne may not have done so badly out of the deal after all.

— Pádraig Belton, contributing editor, special to Connecting Africa