Hillhouse, Boyu in Talks to Invest in GDS’s Southeast Asia Data Centers
(Bloomberg) -- Alternative asset managers Hillhouse Capital, Boyu Capital and CDH Investments are in advanced talks to invest in GDS Holdings Ltd.’s data center business outside China, according to people familiar with the matter.
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An agreement on a total investment of $500 million to $600 million may be reached as soon as the coming weeks, though no final decisions have been made, the people said, asking not to be identified because the matter is private. Other investors could also be involved in a deal, they said.
GDS’s American depositary receipts soared 28% to $8.23 at 9:42 a.m. Monday in New York, giving the company a market value of almost $1.6 billion. In Hong Kong, its shares gained 18% to close at HK$7.48.
“The company confirms that it has been in discussion with several private equity investors regarding a potential transaction with respect to its international business,” GDS said in a statement after Bloomberg News reported the talks. No agreement has been reached and there’s no certainty that any transaction will proceed, it said.
Representatives for Hillhouse, a long-term investor in GDS, Boyu and CDH didn’t respond to requests for comment.
Shanghai-based GDS is expanding in Southeast Asia and has been contemplating selling a minority stake, Bloomberg reported in February last year.
Private equity firms that traditionally focused on China are increasingly shifting their attention to other areas like Southeast Asia. Last month, Hillhouse bought Singapore-based business services provider InCorp Global from private equity firm TA Associates for an undisclosed amount.
GDS develops and operates dozens of data centers in cities including Beijing, Guangzhou, Shanghai and Shenzhen, according to its website. As part of its expansion overseas, it is providing services at a third-party data center in Singapore and building facilities in Malaysia and Indonesia.
(Updates with company statement in fourth paragraph.)
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