Billionaire Lei Zhang’s Hillhouse Investment and Boyu Capital have agreed to purchase a 44% stake in GDS Holdings’ data center assets outside mainland China for $587 million. This investment will allow Shanghai-based GDS Holdings to retain a 56% stake in its Singapore-based subsidiary, GDS International, after the transaction is completed. The remaining ownership in GDS International will be held by investors in the series A convertible preferred shares such as Boyu Hillhouse, Princeville Capital, Rava Partners, and Tekne Capital. The transaction gives GDS International an enterprise value of $2.3 billion, including forecasted debt for the year.
GDS International currently has 330 megawatts of data center capacity in operation or under construction, with an additional 340 MW designated for future development across Hong Kong, Singapore, Malaysia, and Indonesia. Chairman and CEO of GDS Holdings, William Huang, expressed his excitement for the company’s growth potential, stating that the capital raising is a significant step forward in their strategy to secure dedicated financing for the development of their international business on a standalone basis. In a short period of time, GDS International has established market-leading positions in major hub markets such as Hong Kong and Singapore-Johor-Batam, with plans for further expansion into other new markets.
GDS International has already garnered commitments and reservations from both global and Chinese customers for over 200 megawatts of data center capacity, with more than 70 megawatts already generating revenue. The company has raised over $1 billion in paid-up capital, including funds injected by parent company GDS Holdings and the fresh capital from the series A investors. This investment highlights the growing demand for data centers in Asia, driven by the increasing need for cloud services provided by tech giants like Amazon and Google.
Companies are ramping up the development of data centers across Asia to meet the rising demand for cloud services, spurring investments such as the one made by Hillhouse Investment and Boyu Capital in GDS Holdings’ data center assets. This influx of capital will enable GDS International to further expand its presence in key markets and capitalize on the opportunities for growth within the region. With a strong portfolio of data center capacity and a growing customer base, GDS International is well-positioned to leverage this investment to drive its international business forward and solidify its position as a key player in the data center industry.
The purchase of a significant stake in GDS Holdings’ data center assets outside mainland China represents a strategic move by Hillhouse Investment, Boyu Capital, and other investors to tap into the growing demand for data center services in Asia. The enterprise value of $2.3 billion for GDS International underscores the attractiveness of the company’s assets and the potential for future growth in key markets such as Hong Kong and Singapore. As the data center industry continues to evolve, investments like this will play a crucial role in supporting the expansion and development of infrastructure to meet the increasing demand for cloud services and digital connectivity across the region.
