- Verizon (VZ -0.8%) is finally close to selling its data center business -- and Equinix (EQIX +0.1%) is likely the buyer, Cowen says.
- "We believe a transaction involving Verizon's co-location assets is imminent and that Equinix is the most likely acquirer," writes analyst Colby Synesael. That deal would come around $3.5B, he says.
- Verizon moved on news last fall that it would seek to sell enterprise assets and likely undo its 2011 $1.4B purchase of Terremark, though CFO Fran Shammo tried to tamp down those reports as "speculative."
- After a sales process reportedly launched in February, by summer the price tag had been reported as up to $3B, a price that weeds out several strategic buyers and left observers speculating about private-equity purchasers.
- "Based on our channel checks, we believe the portfolio includes 14 facilities which primarily include those Verizon inherited when it bought Terremark in 2011," Synesael says. "We estimate EQIX could pay 13 to 13.5 times EBITDA, or $3.5 billion, and believe such a transaction would be viewed as positive for Equinix and neutral to Verizon."