The process of post-merger integration involves the consolidation and reorganization of the assets, resources, and personnel of the two entities to achieve the efficiencies that prompted the merger or acquisition.
“Equinix has been in business for 25 years and is publicly traded, so they follow a structured process that we do not implement here,” remarked a MainOne employee who preferred to remain anonymous for candidness.
As part of the integration, employees were issued new employment contracts. Although these contracts included a salary increase, it was less substantial than many had anticipated, according to two individuals familiar with the situation. This discrepancy in expectations led to delays in signing the new contracts.
Another source with knowledge of the situation indicated that the salary increase would not be reflected until March 2025, coinciding with the company's fiscal year-end, and referenced an internal survey revealing that some employees were dissatisfied with their compensation packages.
“What they are offering us is reasonable,” stated another MainOne employee, emphasizing that salaries remained in naira but refraining from providing further details.
The integration process spanned nearly two years, primarily due to workload migration, which entails transferring applications, data, and IT processes across various environments, as noted by two individuals.
This migration may involve reallocating resources among physical servers, virtual machines, or transitioning from on-premise data centers to cloud platforms.
“Integrating systems can sometimes take a considerable amount of time. Numerous factors come into play, including the size of the organizations, the differences in their product offerings, pricing structures, operational support systems, and business support systems,” explained a telecom industry executive who requested anonymity.
MainOne has chosen not to comment on any aspect of this article.
Integration typically follows an acquisition as a crucial next step. This process often necessitates the formation of a post-merger integration team from both organizations to identify the elements requiring integration—such as corporate culture, personnel, operations, processes, technology, and IT systems—and to strategize the implementation. The timeline for post-acquisition integration can span from one to three years, contingent upon the team's ability to execute the integration plan while maintaining operational efficiency.
This scenario has been evident in numerous acquisitions, including that of Econet, which was sold to Vodacom and faced challenges with corporate alignment until it transitioned to Celtel, then Zain, and ultimately Airtel.
Similarly, 9mobile, after its acquisition by LH Telecom, is currently navigating the post-acquisition integration phase, while Medallion, a data center operator, was acquired by Digital Reality in 2021.
MainOne will retain its branding as “MainOne, Solutions by Equinix,” with its data center division, previously known as MDXi, now operating under the Equinix name. Funke Opeke will continue as the overall managing director, and the leaders of MDXi will remain at the helm of the data center operations. A gradual integration of Equinix’s global culture is anticipated.
These developments position Equinix as a key player in the Nigerian cable and data center markets, a status it has held since entering the market in January 2010 with the landing of its submarine cable in Lagos. MainOne, Solutions by Equinix will maintain its focus on internet service provision and cable operations as a division within the Equinix group.
Equinix plans to initiate three significant data center projects, including an interconnection hub in Victoria Island, expected to be completed by 2025, a data center in Lekki with a capacity of over 1000 racks scheduled for 2026, and a data center in Port Harcourt, where construction is already underway following the arrival of Meta’s 2Africa submarine cable.
This expansion comes at a crucial time as Nigeria experiences an increasing demand for data centres to leverage the capacity of its eight submarine cables. Currently, the country hosts 14 data centres with a total capacity of less than 70 megawatts. Other players in the market, such as Rack Centre, Medallion, and Open Access Data Centre (OADC), are also in the process of constructing larger facilities.
Telecommunications leaders like MTN and Airtel have revealed their intentions to enter the data centre sector, fostering a more competitive landscape for hosting services.
A telecom industry executive remarked, “I believe this is a strategic acquisition for Equinix, providing a secure entry into a significant market where their global clients are already established, thus facilitating service delivery.”
Equinix is enhancing its fiber network in Nigeria, having already established metro fiber in Akwa Ibom. The company is now expanding this fiber capacity through the 2Africa cable to Port Harcourt in Rivers State, where it will link to a newly planned data centre. There are also plans to connect the entire South-South region with fiber cables.
MDXi previously operated two data centres in Lagos, which are now fully integrated into Equinix's operations. These centres will be linked to Equinix’s extensive global network of 260 data centres across 71 cities in 33 countries. This interconnectivity allows for efficient data sharing, content delivery, and backup redundancy through Data Centre Interconnect (DCI) technology, facilitating data movement both within Nigeria and across long transoceanic routes like the Pacific and Atlantic.
Equinix's entry into Nigeria in 2022 marked its first foray into the African market, and the company has since expanded to South Africa, where it plans to open a new data centre in Johannesburg on October 23, 2024.