Equinix, the data center company, has the distinction of recently recording its 69th straight positive quarter. One way that it has achieved that kind of revenue consistency is through strategic acquisitions. Today, the company announced that it’s purchasing 13 data centers from Bell Canada for $750 million, greatly expanding its footing in the country.
The deal is financially detailed by Equinix across two axes, including how much the data centers cost in terms of revenue, and adjusted profit. Regarding revenue, Equinix notes that it is paying $750 million for what it estimates to be $105 million in “annualized revenue,” calculated using the most recent quarter’s results multiplied by four. This gives the purchase a revenue multiple of a little over 7x.
Equinix also provided an adjusted profit multiple, saying that the 13 data center locations “[represent] a purchase multiple of approximately 15x EV / adjusted EBITDA.” Unpacking that, the company is saying that the asset’s enterprise value (similar to market capitalization, a popular valuation metric for public companies) is worth about 15 times its earnings before interest, taxes, deprecation and amortization (EBITDA). This seems a healthy price, but not one that is outrageous.
The acquisition not only gives the company that additional revenue and a stronger foothold in the tenth largest economy in the world, it also gains 600 customers using the Bell data centers, of which 500 are net new.
As much of the world is attempting to digitally transform in the midst of the pandemic and current economic crisis, Equinix sees this as an opportunity to help more Canadian customers go digital more quickly.
“Equinix has been serving the Canadian market in Toronto for more than a decade. This expansion and scale gives the Canadian market a clear and rapid migration path to digital transformation. We’re looking forward to deepening our relationships with our existing Canada-based customers and helping new companies throughout the country position themselves for digital success,” Jon Lin, Equinix president, Americas told TechCrunch.
This is not the first time that Equinix has taken a bunch of data centers off the hands of a telco. In fact, three years ago, the company bought 29 centers from Verizon (which is the owner of TechCrunch) for $3.6 billion.
As telcos move away from the data center business, companies like Equinix are able to come in and expand into new markets and increase revenue. It’s one of the ways it continues to generate positive revenue year after year.
Today’s deal is just part of that strategy to keep expanding into new markets and finding new ways to generate additional revenue as more companies use their services. Equinix rents space in its data centers and provides all the services that companies need without having to run their own. That would include things like heating, cooling, racks and wiring.
Even though public cloud companies like Amazon, Microsoft and Google are generating headlines with growing revenues, plenty of companies still want to run their own equipment without going to the expense of actually owning the building where the equipment resides.
Today’s deal is expected to close in the second half of the year, assuming it clears all of the regulatory scrutiny required in a purchase like this.
First Nations losing oil revenue amid fall in consumption, drilling – CBC.ca
In a windswept corner of the Blood Tribe land in southwest Albert is a pumpjack that towers more than three storeys off the ground and reaches three kilometres deep. It’s one of only two new wells to be drilled on the First Nation in the last year, as the downturn in the industry has resulted in reduced drilling across Western Canada.
The well was drilled in December and began operating in February, less than one month before oil prices crashed further as the pandemic spread across the globe. Fuel consumption has fallen sharply as countries continue to react to the virus, while oil production remains relatively high around the globe.
For First Nations that rely on collecting royalties and rent from oilpatch activity on their reserve land, those funds have quickly dried up. In fact, it’s becoming costlier to manage oil and gas production on First Nations land than the amount of money collected from industry.
Indian Oil and Gas Canada (IOGC) is the federal agency, fully funded by Ottawa, responsible for overseeing oil and gas production on those lands and has a monthly budget of about $1 million. In May, when the most recent data is available, the agency only collected about $740,000.
“It doesn’t make sense,” said Chief Roy Fox, with the Blood Tribe. “More money is being spent than what we are realizing.”
Fox is keenly aware of the financial situation in the oilpatch, considering there are about 300 oil and gas wells on Blood Tribe land, and the First Nation has a working interest in some of them. Compared to the beginning of the year, revenue from oil and gas activity is down 75 per cent, according to Fox.
WATCH | Chief Roy Fox on the impact of low royalties:
Royalties are down as a result of low commodity prices and some companies lowering production levels as some wells become unprofitable to operate.
“In March, April, May, we were really hit with this downturn. Things are picking up a bit, but not as fast as what we would like to see,” he said.
The First Nation uses the revenue to provide programs for elders and youth, improve housing, offer social programs and invest in other business programs, among other initiatives.
“Because of the downturn we won’t be able to help as much,” he said.
The Indian Resource Council, which represents First Nations with oil and gas reserves on their territory, is calling on the federal government to top up the royalties to a minimum of $4 million per month.
“These are really troubling times,” said Stephen Buffalo, the group’s president. “It’s very important at this time that our prime minister really look at our communities to see if we can do something extra on the side to offset what has been lost.”
The council has also asked for a special allotment of the funds earmarked for cleaning up oil oil and gas wells in Western Canada.
Revenues for First Nations have fallen by about 80 per cent in the last decade as commodity prices have fallen.
The declines “are likely to continue,” said Strater Crowfoot, CEO of the IOGC, in an emailed statement.
WATCH | Stephen Buffalo on the opportunity to clean up inactive wells:
“We have heard how challenging the decline in First Nation oil and gas revenue has been for First Nation communities, businesses, and individuals. The government of Canada is working collaboratively with First Nations and their member organizations to explore initiatives to provide support.”
In April, the federal government announced $307 million in relief to help Indigenous businesses and $133 million in June toward stimulating the Indigenous economy.
The Calgary Stampede is mostly deserted due to COVID-19, but the show must go on – The Globe and Mail
Stampede Park is mostly deserted but Calgarians are still finding ways to enjoy some Stampede perks from their cars and backyards.
The Calgary Stampede, which includes a rodeo, midway and exhibition, typically attracts more than 100,000 visitors a day, but it was among many large events forced to cancel this year because of the COVID-19 pandemic. To fill the gap, Stampede organizers and local groups are putting on fireworks, drive-through pancake breakfasts and other events that people can take in at a safe distance.
“You can’t cancel Stampede spirit, so we’re trying to keep that alive even though we can’t celebrate in the traditional way,” said Dana Peers, president and chairman of the Calgary Stampede Board.
The Stampede was scheduled to start on July 3 but was scratched for the first time in more than a century. The 10-day event contributes $540-million to the local economy, organizers say, and creates 4,700 jobs, including 3,500 seasonal workers during the summer. But the Stampede laid off most of its 1,200 year-round employees in March.
Other fairs and exhibitions across the country are also facing cancellations. Toronto’s Canadian National Exhibition, which attracts 1.4 million visitors each year in August, was cancelled in May – only the second time it has been shut down in its 142-year history. Vancouver’s Pacific National Exhibition in August is also out of commission.
In Calgary, instead of piling onto Scotsman’s Hill, a popular spot to watch the fireworks that are part of the Stampede’s nightly grandstand show, local residents with a view of the city skyline can see one of two fireworks displays from their homes. The first was last Friday and the second is this weekend. And the daily pancake breakfasts that usually draw large crowds across Calgary instead will involve lineups of cars and trucks.
“For lots of people, it’s synonymous with the Calgary Stampede that they’re going to have a free pancake breakfast,” Mr. Peers said. “We wanted to keep that tradition alive and the new rules have brought us to this drive-through method.”
The Stampede is the biggest event of the year for food trucks and vendors. To make up some of the loss, YYC Food Trucks is playing host to a 10-day event mimicking the midway, inviting people to drive up to their favourite spots. The event is putting more than 400 people and 30 trucks back to work, according to Jennifer Andrews, co-owner of YYC Food Trucks. A lineup of about 50 cars had formed 10 minutes before opening on the event’s first day.
“A lot of trucks have said that if it hadn’t been for the drive-through, they wouldn’t be in business,” Ms. Andrews said. “The Calgary spirit is vibrant and we’re survivors.”
The Calgary Chamber of Commerce is also holding a series of virtual events to bring the business community together over drinks and food from home. Networking events and parties in local restaurants, bars and temporary tents that sprout up throughout the city’s downtown are a major part of the Stampede experience traditionally for corporate Calgary and business leaders who visit from across the country each summer.
The festival acts as the launching point for new client relationships and deals – much of which would not happen without the Stampede, according to chamber president and chief executive officer Sandip Lalli.
“The business community is having a hard time connecting and generating leads for business because of COVID-19,” Ms. Lalli said. “A lot of the conversation will probably be around how they got through the last six months.”
To keep the Stampede spirit going this summer, some crowd-drawing attractions are being held with physical distancing in mind.
A small group welcomed parade marshal Filipe Masetti Leite as he arrived at the Calgary Stampede grounds last Friday after a 13-month ride on horseback from Anchorage, Alaska. The 33-year-old Brazilian, who immigrated to Canada as a teenager, completed a 3,400-kilometre journey the same day the Stampede was supposed to begin.
“What this rodeo means, not only to Canada but to the world, thank you boys and girls,” he said as he stood on the stage at the rodeo grandstand. “I’m a cowboy and the older I get I fear our world ending, and I value it so much because the greatest lessons in my life were taught from a man who wears a cowboy hat and spurs, and I would not have finished this journey if I weren’t a cowboy.”
Local organizations are also holding their own community celebrations. Some breweries are planning Stampede-themed parties with cowboy hats, hay bales and wagon wheels.
Grace Presbyterian Church is putting together a social-media video of prerecorded footage of people at home making pancakes and line-dancing. After more than 800 people attended the church’s pancake breakfast last year, the group hopes to provide its community members with a way to participate in the Stampede during the pandemic while fundraising for a local charity.
“There is a real sense of community spirit with the Stampede breakfasts that happen all across the city and people gathering together and celebrate,” said Rev. Jake Van Pernis. “We put together a virtual stampede party as a way of continuing with that sense of community connection.”
But some businesses are not able to adapt and Stampede guests will have to wait until pandemic restrictions lift for festival favourites to return. Amusement-park rides and games providers and retailers that display products at the midway are still unable to reopen.
“These businesses essentially will have little to no revenue for the next year and they’re going to have to hang on to make it through to next year,” Mr. Peers said. “It’s not an easy thing to say and it’s not an easy thing to do.”
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Free non-medical masks to be available at drive-thrus again – Calgary Herald
Article content continued
The initial round of mask giveaways wasn’t without a hitch. Just a couple days after launch, there were online reports restaurant employees were handing out full bags of masks to people who had asked for one or two, or hadn’t asked for any.
Alberta Health said on June 11, they had been in contact with those restaurants to ensure they understood each person was only supposed to receive one package of four masks. Each partner restaurant has been provided with the same distribution instructions.
Dr. Deena Hinshaw, Alberta’s chief medical officer of health, continues to encourage Albertans to wear non-medical masks when it would otherwise be difficult to maintain physical distancing of two metres.
“We may be done with COVID-19 but it’s not done with us. We continue to (identify) cases in all age groups and have seen a particular increase in those 20 to 39 (years old). BBQs, funerals, birthday parties and get-togethers have lead to dozens of cases,” Hinshaw posted on Twitter Sunday.
First Nations losing oil revenue amid fall in consumption, drilling – CBC.ca
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