Bell Canada Enterprises (BCE) sold 25 data centres held in 13 data centre sites for CA$1.04 billion to U.S. data centre company Equinix.
The transaction ranks Bell Business Markets as the first Equinix Platinum Partner in Canada, and it also means that Bell enterprise customers will gain access to Equinix’s global integrated network and cloud solutions. The data centre ownership handoff will not cause service disruptions to the 600 existing BCE data centre customers, according to Bell, which also added in a recent press release that it will continue to operate its five remaining data centres in Canada.
A Canadian equity research report by Canaccord Genuity said that the purchase indicates that BCE no longer sees data centres as a “priority for differentiation”. The report stated that BCE is looking to focus on its core investments, which are its network infrastructure and spectrum. Selling off its data centres reduces BCE’s net debt by $1 billion and increases its capital for the upcoming 3.5GHz 5G spectrum auction that’s expected to begin at the end of this year.
Between 2012 and 2016, BCE spent $855 million to acquire 11 data centres from Q9 Networks. With the sale price of 13 data centre sites at $1.04 billion, the Canaccord Genuity report predicts that the deal is equivalent to BCE’s original purchase price and does not translate into a gain or loss for the company.
Equinix says it expects the purchase to generate approximately CA$150 million in annualized revenue. In addition, the acquisition will open seven new metros in six provinces, increase accessibility to hybrid multi-cloud solutions for Canadian customers. In the future, Equinix is looking to add the Equinix Cloud Exchange Fabric to all 13 data centre sites.
“The acquisition of these 13 strategic assets further extends the depth and breadth of Equinix’s global platform, which currently spans 26 countries and 55 metros,” said Jon Lin, president of Equinix Americas in a statement. “It will position Equinix as a market leader for data center and interconnection services in Canada, with high-quality assets from coast to coast and a large, diversified ecosystem of Canadian businesses. Additionally, it opens key gateways for North America to Asia through Vancouver and North America to Europe through the submarine cable systems in the Millidgeville area.”
The transaction is expected to complete in the second half of 2020.