Equinix Expands Footprint in Africa

Digital infrastructure company Equinix (EQIX) has completed the acquisition of MainOne, which provides data center and connectivity solutions in West Africa, at an enterprise value of $320 million. EQIX shares have climbed 8.7% over the past month.

The move bolsters Equinix’s strategy to become a major carrier-neutral digital infrastructure company in Africa that will provide a full range of technologies and connectivity in Nigeria, Ghana, and Cote d’Ivoire.

MainOne currently has three operational data centers and an additional facility is expected to begin operations in Lagos in April 2022. Recently, Equinix has also announced acquisitions in key geographies of South America, Canada, and India.

Hedge Fund Activity

TipRanks data points that Wall Street’s top hedge funds have decreased holdings in Equinix by 98,600 shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 14 hedge funds.

Valuation Speaks

Now let’s have a look at some of the key metrics for Equinix and how it fares against the broader industry. The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 38.5% lags the industry median of 56.2%, implying that Equinix has legroom to streamline its costs. Additionally, a forward non-GAAP P/E multiple of 107.4 indicates the share price of the company is expensive, compared to the industry median multiple of 46.2.

Further, a return on common equity of 4.6% implies Equinix is less efficient at putting its funds to work than the broader industry, where the median figure is 5.3%.

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