21Vianet Group, Inc. (Nasdaq:VNET) ("21Vianet" or the "Company"),
the largest carrier-neutral internet data center services provider
in China, and Warburg Pincus, a leading global private equity firm
focused on growth investing, today announced the two companies have
signed a strategic investment agreement (the “JV Agreement”) to
form a joint venture and establish a digital real estate platform
(the “JV”) in China. The JV will be dedicated to pursuing
development and acquisition opportunities in the wholesale and
built-to-suit segments of China’s data center market.
Pursuant to the JV Agreement, 21Vianet will seed
the JV with four existing high-performing IDC assets, valued at
over US$300 million, and Warburg Pincus will contribute direct
capital and extensive industry network and resources in the real
estate sector. Also pursuant to the JV Agreement, 21Vianet will
continue to own 51% of the equity interests in the four existing
IDC assets while Warburg Pincus will own the remaining 49%. With
respect to future projects to be developed by the JV, 21Vianet will
initially own 49% of the equity interests and Warburg Pincus will
initially own 51% of the equity interests. The transactions
contemplated by the JV Agreement are expected to close in multiple
tranches in the first half of 2017 subject to the satisfaction of
certain conditions.
With strong demand for data center space driven
by the exponential growth in data usage and cloud services, the JV
will serve as a dedicated vehicle that focuses on wholesale
customers and enterprises and an expanded product offering across
turn-key data centers, standard modules and built-to-suit
solutions. The goal is for the platform to grow to 80,000 to
100,000 cabinets over the next five to seven years.
Mr. Steve Zhang, CEO of 21Vianet, stated, “We
are extremely excited to partner with Warburg Pincus, one of the
world’s leading private equity firms, and establish a specialized
platform to address China’s wholesale data center market.
While the Company stays focused on its core retail colocation
and cloud services, which are centered on interconnection and an
open cloud ecosystem, the JV will help strengthen our IDC
competitive advantages through broader product offerings and
specialized business solutions. As China’s data center industry
moves towards increased specialization and verticalization, we
firmly believe that the JV will enable us to effectively capture
incremental market opportunities from diverse customers and attract
more world-class talent.”
“Combining 21Vianet’s 20 years of experience in
data center operations and Warburg Pincus’ rich resources in
capital markets, industry network and track record in partnering
with leading enterprises in China, the JV represents a strategic
alliance to advance the development of data center real estate
opportunities in China,” commented Mr. Terry Wang, CFO of 21Vianet.
“By separating the capital intensive data center infrastructure
layer from the Company’s asset light businesses, we are confident
that we will lessen our dependence on Capex, improve our free cash
flow, capital structure and with it, overall shareholders’
value.”
Ellen Ng, Managing Director of Warburg Pincus,
commented, "Data centers have been one of the best performing real
estate asset classes globally and one supported by compelling
secular trends in China. We have tracked the sector in China
for years and are delighted to collaborate with 21Vianet to form
the JV. Our partnership will create significant synergies by
combining 21Vianet’s deep industry knowhow and client resources
with Warburg Pincus’ international resources, financing channels
and industry networks in both the real estate and TMT sectors in
China.”
About 21Vianet21Vianet Group,
Inc. is a leading carrier-neutral internet data center services
provider in China. 21Vianet provides hosting and related services,
managed network services, cloud infrastructure services, content
delivery network services, consumer broadband services and business
VPN services, improving the reliability, security and speed of its
customers' internet infrastructure. Customers may locate their
servers and networking equipment in 21Vianet's data centers and
connect to China's internet backbone through 21Vianet's extensive
fiber optic network. In addition, 21Vianet's proprietary smart
routing technology enables customers' data to be delivered across
the internet quickly and reliably. 21Vianet operates in 44 cities
throughout China, servicing a diversified and loyal base of more
than 2,000 customers that span numerous industries ranging from
internet companies to government entities and blue-chip enterprises
to small and mid-sized enterprises.
About Warburg PincusWarburg
Pincus LLC is a leading global private equity firm focused on
growth investing. The firm has more than $40 billion in private
equity assets under management. The firm’s active portfolio of more
than 120 companies is highly diversified by stage, sector and
geography. Warburg Pincus is an experienced partner to management
teams seeking to build durable companies with sustainable value.
Founded in 1966, Warburg Pincus has raised 15 private equity funds,
which have invested more than $58 billion in over 760 companies in
more than 40 countries.
Warburg Pincus has a strong track record
investing in China’s property sector. It has invested more than
$2.5 billion into 20 companies and projects in China including
developers, operators, asset managers, and asset/project portfolio
joint ventures in all major asset types. The firm’s notable
investments in the real estate sector include China Jinmao, eShang
Redwood Group, Red Star Macalline, D&J China, Mofang Apartment,
Guangzhou R&F, 7 Days Inn, Greentown and Sunshine 100.
The firm is headquartered in New York with
offices in Amsterdam, Beijing, Hong Kong, London, Luxembourg,
Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and
Singapore. For more information please visit
www.warburgpincus.com.
Safe Harbor Statement This
announcement contains forward-looking statements. These
forward-looking statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. 21Vianet may also
make written or oral forward-looking statements in its reports
filed with, or furnished to, the U.S. Securities and Exchange
Commission, in its annual reports to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Statements
that are not historical facts, including statements about
21Vianet's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement, including but not limited to the following: 21Vianet's
goals and strategies; 21Vianet's expansion plans; the expected
growth of the data center services market; expectations regarding
demand for, and market acceptance of, 21Vianet's services;
21Vianet's expectations regarding keeping and strengthening its
relationships with customers; 21Vianet's plans to invest in
research and development to enhance its solution and service
offerings; and general economic and business conditions in the
regions where 21Vianet provides solutions and services. Further
information regarding these and other risks is included in
21Vianet's reports filed with, or furnished to the Securities and
Exchange Commission. All information provided in this press release
and in the attachments is as of the date of this press release, and
21Vianet undertakes no duty to update such information, except as
required under applicable law.
Investor Relations Contact:
21Vianet Group, Inc.
Qing Liu
+86 10 8456 2121 ext 1313
IR@21Vianet.com
ICR, Inc.
Violet Gu
+1 (646) 405-4922
IR@21Vianet.com
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