In a notable development, alternative asset managers Hillhouse Capital, Boyu Capital, and CDH Investments are reportedly in advanced negotiations to invest in GDS Holdings Ltd.'s data center business outside of China. Sources familiar with the matter suggest that a potential agreement on a total investment ranging from $500 million to $600 million is on the horizon, with final decisions expected in the coming weeks. Other investors may also join the deal.
Based in Shanghai, GDS has been actively expanding its presence in Southeast Asia and had previously considered selling a minority stake, as reported by Bloomberg News in February of the previous year.
Representatives from Hillhouse, Boyu, and CDH, as well as GDS, have not commented on the ongoing discussions.
This move reflects a trend of private equity firms, traditionally focused on China, diversifying their investments into other regions such as Southeast Asia. Hillhouse's recent acquisition of Singapore-based business services provider InCorp Global further exemplifies this strategic shift.
GDS, known for developing and operating multiple data centers in prominent Chinese cities, including Beijing, Guangzhou, Shanghai, and Shenzhen, is expanding its footprint overseas. It currently offers services at a third-party data center in Singapore and is actively constructing facilities in Malaysia and Indonesia.
Despite its global aspirations, GDS has faced a challenging market, with its American Depositary Receipts experiencing a 59% decline over the past 12 months, valuing the company at approximately $1.2 billion. Reports also indicate that GDS, which trades in Hong Kong, has contemplated a secondary listing in Singapore to bolster its market presence.