Equinix acquires two highly interconnected data centers in Mumbai to support its pan-Indian expansion strategy. Equinix CEO Charles Meyers says the deal gives global customers access to one of the fastest growing markets.
Equinix announces its expansion into India through the acquisition of the India operations of GPX Global Systems, Inc. The all-cash transaction value of USD 161 million represents a multiple of approximately 15x the projected EBITDA at full utilization. The acquisition is expected to close in Q1 2021, subject to customary closing conditions including regulatory approval.
The acquisition will extend Platform Equinix to India with the addition of two interconnected data centers, providing a platform for additional expansion across the country. Equinix says the acquisition will provide customers access to a network-dense data center campus with more than 200 international brands and local companies, including cloud service providers, leading networks, CDN providers, all local carriers, 130 ISPs and four internet exchanges.
Equinix says both data centers are strategically located in Mumbai, home to the critical IT infrastructure of numerous global organizations and with international connectivity serviced by subsea cables at landing sites located nearby.
According to Synergy Research Group Chief Analyst John Dinsdale, the data center market in India is expected to exceed USD 1 billion in 2020 and grow at 12% CAGR from 2019-2024, the third highest rate in the world.
“Our forecasts show that the country will become the seventh largest data center market in the world in 2021,” says Dinsdale.
Furthermore, according to a McKinsey report, core digital sectors in India, such as IT and digital communication services, are projected to double in size by 2025 to contribute USD 355-435 billion to GDP. To further address the proliferation of digitization of the country, this acquisition will allow Equinix to support its existing network, content, cloud and enterprise customers looking to expand in this rapidly growing market.
Equinix claims the expansion will also help local companies accelerate their digital transformation journeys by deploying their infrastructures, applications and services closer to the edge through the globally interconnected platform of more than 210 International Business Exchange data centers.
Under the agreement, Equinix intends to acquire GPX India’s business consisting of a fiber-connected campus in Mumbai with two data centers, adding more than 1,350 cabinets, with an additional 500 cabinets at full buildout. The facilities will add more than 90,000 square feet of colocation space to Platform Equinix when fully built.
GPX India offers a cloud dense environment and access to major cloud services, including Amazon Direct Connect, Google Cloud Dedicated Interconnect and Oracle Cloud Infrastructure FastConnect. GPX India also has an interconnection solution that enables customers to connect to multiple cloud platforms designed to address the vast appetite for cloud services in the country where the cloud services market is expected to grow threefold to more than USD 7.1 billion from 2018 to 2022.2 billion.
GPX India facilities also host key internet exchanges such as Mumbai IX-DECIX, AMS-IX India, Extreme IX and Bharat IX, allowing ISPs, carriers, CDNs and large enterprises to exchange internet traffic.
Globally, Platform Equinix comprises more than 210 data centers across 56 metros and 26 countries, providing data center and interconnection services for over 9,500 of the world’s leading businesses, including more than 50% of Fortune 500 companies. Today, Equinix operates 46 IBX data centers in Asia-Pacific across 13 metros in Australia, China, Hong Kong, Indonesia, Osaka, Seoul, Singapore and Tokyo.
Commenting on the acquisition, Equinix President and CEO Charles Meyers says India represents the second largest internet user base in the world, with consumption expected to grow with the continued advancement of internet infrastructure, smartphone ownership and the penetration of 4G and 5G.
“Extending Platform Equinix to India has long been a strategic objective for Equinix and we are excited that the GPX transaction will allow us to capitalize on this market opportunity and meet the needs of our customers as they seek to expand their digital businesses. The acquisition of GPX’s business in India means we are able to make a giant leap forward in terms of growing our ecosystem in India, and gives us a solid foundation for rapid growth and expansion in the country. This acquisition follows the recent announcement of our planned expansion in Canada and is a testament to our continued focus on expanding our global reach as companies continue to view interconnection at the digital edge as a business imperative,” says Meyers.
(Ed. J.P. Morgan, Cyril Amarchand Mangaldas and Deloitte Touche Tohmatsu India LLP acted as advisors to Equinix in connection with this transaction. Featured image by Photographer Raghav Modi.)