Acquisitions

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Pending Acquisitions

Acquisition of Empresa Nacional De Telecomunicaciones S.A. ("Entel") Chile Data Centers (the "Entel Chile Acquisition") and Peru Data Center (the "Entel Peru Acquisition")

On March 18, 2022, we announced our planned expansion in Latin America through an acquisition of data centers from Entel, a leading Chilean telecommunications provider. Our planned expansion includes four data centers in Chile for a purchase price of UF16.7 million, or approximately $664.0 million at the exchange rate in effect on that date. The acquisition of the four data centers in Chile is expected to close in the second quarter of 2022, subject to customary conditions. On April 27, 2022, we signed an agreement with Entel to acquire a data center in Peru for a purchase price of PEN270.8 million, or approximately $70.7 million at the exchange rate in effect on that date. The acquisition of the data center in Peru is pending the achievement of certain closing conditions, for which the timing is uncertain, and will be accounted for as a separate transaction. After close of the acquisitions, the operating results of the acquired data centers will be reported in the Americas region. The Entel acquisitions support our ongoing expansion to meet customer demand in the Latin American market.

2022 Acquisition

Acquisition of MainOne Cable Company Ltd. (the "MainOne Acquisition")

On April 1, 2022, we completed the acquisition of all outstanding shares of MainOne Cable Company Ltd. ("MainOne"), consisting of four data centers as well as a subsea cable and terrestrial fiber network. We acquired MainOne and its assets in an all-cash transaction at a purchase price of approximately $320.0 million. The MainOne Acquisition supports our desire to meet customer demand in the West African market. After close of the acquisition, the operating results of the acquired business will be reported in the EMEA region. The valuation of assets acquired and liabilities assumed are still being appraised by a third-party and as such, the purchase price allocation is not yet complete.

2021 Acquisition

Acquisition of GPX India (the "GPX India Acquisition")

On September 1, 2021, we completed the acquisition of GPX India, representing two data centers in Mumbai, India, for a total purchase consideration of approximately INR12.5 billion, or $170.5 million at the exchange rate in effect on that date. The GPX India Acquisition supports our desire to meet customer demand in the Indian market.

Purchase Price Allocation

The GPX India Acquisition constitutes a business under the accounting standard for business combinations and, therefore, was accounted for as a business combination using the acquisition method of accounting. Under this method, the total purchase price is allocated to the assets acquired and liabilities assumed measured at fair value on the date of acquisition.

As of March 31, 2022, we had completed the detailed valuation analysis to derive the fair value of assets acquired and liabilities assumed from the GPX India Acquisition, including property, plant and equipment, intangible assets and the related tax impacts.

A summary of the final allocation of total purchase consideration is presented as follows (in thousands):


	GPX India(1)
	Final
Cash and cash equivalents	$	9,406
Accounts receivable	4,399
Other current assets	8,883
Property, plant and equipment	88,130
Operating lease right-of-use assets	62
Intangible assets	15,408
Goodwill	77,145
Deferred tax and other assets	20
Total assets acquired	203,453
Accounts payable and accrued liabilities	(1,566)
Other current liabilities	(478)
Operating lease liabilities	(62)
Finance lease liabilities	(20,565)
Deferred tax and other liabilities	(10,317)
Net assets acquired	$	170,465

(1)The purchase price allocation adjustments since the provisional amounts reported as of December 31, 2021 were not significant.

Property, plant and equipment - The fair values of property, plant and equipment acquired from the GPX India Acquisition was estimated by applying the cost approach, with the exception of land, which we estimated by applying the market approach. The key assumptions of the cost approach include replacement cost new, physical deterioration, functional and economic obsolescence, economic useful life, remaining useful life, age and effective age.

Intangible assets - The following table presents certain information on the acquired intangible assets (in thousands):


Intangible Assets	Fair Value		Estimated Useful Lives (Years)	Weighted-average Estimated Useful Lives (Years)	Discount Rate
GPX India:
Customer relationships (1)	$	15,408	15.0	15.0	11.0	%

(1)The fair value was estimated by calculating the present value of estimated future operating cash flows generated from existing customers less costs to realize the revenue. The rates reflect the nature of the assets as they relate to the risk and uncertainty of the estimated future operating cash flows, as well as the risk of the country within which the acquired business operates.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. Goodwill is attributable to the workforce of the acquired business and the projected revenue increase expected to arise from future customers after the acquisition. Goodwill from the GPX India Acquisition is attributable to the Asia-Pacific region and is not deductible for local tax purposes.