Data center firm GDS reveals investor conversations on potential mergers outside China

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Data center firm GDS reveals investor conversations on potential mergers outside China
Data center firm GDS reveals investor conversations on potential mergers outside China

GDS Holdings, a Chinese data center developer and operator, revealed that it was in conversation with several private equity investors about expanding its operations beyond China.

GDS Holdings (9698.HK), a Chinese data center developer and operator, announced that it was in talks with several private equity investors about expanding its operations outside of China.

The Hong Kong-listed company made the disclosure in a stock exchange filing late Monday that Hillhouse, Boyu Capital, and CDH Investments are in advanced talks to invest in GDS’ data center business outside China.

According to people familiar with the subject, an agreement on a total investment of $500 million to $600 million might be achieved as soon as the next few weeks.

“However, as of the date of this announcement, no definitive legal agreements relating to any private equity capital raising have been entered into, and there can be no certainty that any transaction will proceed or, if it does, what the structure of such a transaction may be,” the company stated in its statement.

GDS said that it had previously stated that it was examining options for meeting its foreign business’s financing needs, including the prospect of raising funds from private equity partners.

“As a matter of policy, we do not comment on market rumors or speculation,” Hillhouse said.

Infrastructure assets, such as data centers, have piqued investors’ attention in Asia. In September, global investment company KKR & Co. (KKR.N) acquired 20% of Singapore Telecommunications’ (STEL.SI) regional data center business for S$1.1 billion ($826.51 million).

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