Wednesday, October 21, 2009

Like I said a few hours ago...

Data centers are the new steel mills, and every bit as hot. Just a few minutes ago, Equinix announced the acquisition of Switch & Data, at what I work out to be around 10x LTM EBITDA (10.5x if you use numbers up to Q2, and 9.5x using my Q3 guesstimate). I'm sure this is dramatic news for S&D shareholders, but it's really pretty unsurprising if you've been watching what's been happening in the space over the past three years or so, as I have. This is just the opening salvo in what I expect will be a new phase of consolidation, and I would expect European assets to be pretty high on the agenda.

1 comment:

Global Telecom & Technology said...

That's a massive valuation at 10.5x EBITDA. Deals of more distressed assets are happening at 5-6x EBITDA.