Personal Finance

Instant Analysis: Equinix Buys Verizon Data Centers for $3.6 Billion


Verizon doesn't particularly want to be in the data center business, while Equinix is eager to expand. So this is an appropriate and opportunistic transaction for both parties.

Does it matter?

In its press release, the REIT quoted CEO Steve Smith as saying -- accurately, in my view -- that "the new assets will bring hundreds of new customers to Platform Equinix while establishing a presence in new markets and expanding our footprint in existing key metros."

It's a good time to be in the data center business, as enterprises rely more and more on the services such facilities provide. Equinix has been doing well lately, with revenue and the bottom line in its most recently reported quarter both beating analyst estimates (although adjusted funds from operations -- the most important profitability metric for REITs -- slipped a little). With the Verizon buy, it's making hay while the sun shines, to quote a corny phrase, and investors should be pleased with the portfolio-expanding move.

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Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Equinix and Verizon. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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