Equinix steps into Mexico with $175M purchase of three data centers

Equinix has expanded its already formidable footprint into Mexico with an all cash deal of $175 million to buy three data centers from Axtel. The three data centers are located in the Mexico City and Monterrey metro areas. The deal is expected to close in the first quarter of next year, subject to customary closing conditions including regulatory approval.

The two data centers in the Mexico City area are carrier-neutral facilities with multiple diverse fiber entry points that include five network service providers currently operating within each data center.

The Monterrey area facility is a connectivity gateway between the U.S. and Mexico. It features 25,000 gross square feet of data center space with 12,500 square feet of colocation space. It's a carrier-neutral facility with 10 network service providers.

Mexico is the world’s eleventh-largest economy and the second largest in Latin America. The country’s telecommunications reform of 2013 created opportunities for many businesses seeking to expand into Mexico, allowing for open competition by non-governmental entities, and providing an opportunity for the growth of service provider and enterprise ecosystems. As a result, Equinix sees a largely untapped market that has pent up demand in the region for interconnection and data center services,

Equinix, which is the colocation market leader, said the three facilities generated approximately $21 million of revenues in the 12 months ending December 31, 2018. They will add approximately 115,000 square feet of colocation space to the Equinix International Business Exchange data center portfolio.

Equinix plans to its offer Equinix Cloud Exchange Fabric (EXC Fabric) in all three data centers. ECX Fabric is an on-demand, software-defined network (SDN) enabled interconnection service.

Including upgrade projects, Equinix has invested more than $500 million in its Latin American operations including Brazil, Colombia and now Mexico.

Approximately 40 Axtel employees and contractors, primarily in  operations at the data center, will become Equinix employees or contractors after the deal closes.

RELATED: Equinix stretches global reach of Oracle Cloud Infrastructure across 5 continents

Colocation facilities are taking on added importance as enterprises embark on their digital transformations. Enterprises and service providers are moving into colocation facilities so they can connect to the cloud, to IoT applications and services, and to other enterprises and service providers.

A colocation site is a data center facility where a business can rent space for servers and other computing hardware. Most colocations include the building, cooling, power, bandwidth and physical security, while the customer provides servers and storage.