April 15, 2021

Brookfield, Equinix and Digital Realty reach the final bid for Telefónica's data centers | Companies

Brookfield, Equinix and Digital Realty reach the final bid for Telefónica's data centers | Companies



The US companies Equinix and Digital Realty, both listed on the Nasdaq and specialized in data center management (data centers), have passed the first selection of bids for the data centers of the Spanish operator. The first reaches a market value of more than 31,100 million dollars (about 27,300 million euros) and the second, of 22,600 (around 20,000 million euros). The Canadian fund manager specialized in infrastructure Brookfield is also on the final list, as TMT Finance has published and confirm financial sources to Five days. From Telefónica, they have declined to comment.

Bank of America Merrill Lynch coordinates the sale of this asset, valued at around 600 million dollars (about 527 million euros), according to the bidding round that concluded on January 21, according to TMT Finance. Preliminary offers were also made by venture capital fund managers I Squared Capital, Blackstone and KKR. In November Bloomberg published that the company presided over by José María Álvarez-Pallete was probing the sale of the asset.

Telefónica has 25 data centers in nine countries, in which it offers services for clients and internal Telefónica systems in Spain and Europe. With them, it offers services in the cloud (cloud) to companies through eight facilities in Spain, three in Brazil and the same number in Colombia and Ecuador. It also has centers in Peru (2), Chile (2) and Argentina (2), as well as a large center in Miami (United States) and another in Mexico. It offers, among others, server hosting services, digital archiving and business continuity.

At the time of the creation of Telxius, its subsidiary of telephony and submarine cable towers, in 2016, the company studied including these assets, although it finally discarded it.

The data centers are spread over several of its subsidiaries. Moreover, the operator explains in its 2017 accounts that Telefónica España and Telefónica Hispanoamérica include the business results of the data centers in Spain and Chile, respectively. Before they were computed under the heading "other companies". The objective is to create a society that groups all of them.

At the end of January, Telefónica announced the sale of its stake in the subsidiaries of Guatemala and El Salvador to América Móvil, the group controlled by Carlos Slim. The transaction is valued at 570 million euros, with an amount for the Spanish group for its share of 60% is 342 million.

All these divestments are aimed at reducing the operator's debt. At the end of the third quarter, its net liabilities stood at 42,636 million euros, with a reduction of 3.7% compared to the end of last year.

Thus, Telefónica has reduced the debt between January and September 2018 by 1.594 million for the generation of free cash, financial divestments, among which the sale of 9.99% of Telxius by 379 million to Pontegadea stands out.

These are the estimates of the 2018 accounts

Telefónica will publish the 2018 accounts on February 21st. The consensus of analysts compiled by Bloomberg is expected to have obtained an adjusted result of 3,624 million euros, with a result before depreciation (oibda) of 15,900 million. The leverage ratio, according to these data, stood at 2.8 times. This thermometer was placed at the end of the third quarter in 2.68 times, very slightly above the 2.66 at the close of 2017.

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