Equinix Enters India With $161M GPX Global Deal; RBC Bullish

Equinix, Inc. (EQIX) has announced an all-cash transaction of $161 million for the Indian operations of GPX Global Systems Inc, one of the main providers of carrier-neutral Edge data center services in Africa and South Asia.

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Shares in Equinix pulled back 3% in Tuesday’s trading following the news, bringing the stock’s year-to-date gain to 30%.

According to the companies, the deal is set to close in Q4 2020, subject to customary closing conditions including regulatory approval.

Equinix will acquire GPX’s high-availability, carrier-neutral edge data center business in India, consisting of 2 Tier 4 data centers. These are GPX Mumbai1, a 30,000 sq/ft datacenter, and the recently opened Mumbai2 datacenter which will be a 60,000 sq/ft facility when fully built. The two facilities are interconnected with GPX’s Data Center Interconnect network.

The GPX India team, including the Managing Director and other local management, will be part of the Equinix India business post close.

“Though lacking in geographic breadth compared with other potential Indian targets, GPX India provides Equinix with a foothold in the Mumbai metro, which is India’s largest datacenter market, and provides it what we believe is the closest interconnection pureplay in the country” commented RBC Capital analyst Jonathan Atkin on the deal.

He notes that Equinix will gain GPX India’s current customer base of more than 200 clients, of which 190 are new to Equinix. (See EQIX stock analysis on TipRanks)

New logos include international brands, MNCs, leading CSPs, all 12 major telco carriers, 130+ ISPs, social networks, CDN providers, OTT streaming platforms, and key internet exchanges such as Mumbai IX-DECIX, AMS-IX India, Extreme IX, and Bharat IX, the analyst says.

Atkin ramped up his Equinix price target from $706 to $845 on August 9 after the company posted solid financial and operating results. Overall, the Street shares Atkin’s bullish take on the stock with a Strong Buy Street consensus based on 18 buy ratings vs just 2 hold ratings. Meanwhile the average analyst price target stands at $815.