Xiaomi, Temasek, Kingsoft to invest in China’s 21Vianet

According to a statement, 21Vianet is issuing 98.7 million shares at $3 apiece. Kingsoft will acquire an 11.6% interest in the company for $172 million, while Xiaomi will pay $50 million for 3.4%. Temasek has agreed to purchase a 13.1% stake for $74 million.

As part of the deal, 21Vinet will build at least 5,000 data processing units in China over the next three years, which will be leased for Kingsoft and designated third parties.

"By partnering with Kingsoft and Xiaomi, not only will we be able to expand the scale of our data center footprint, but we will also be able to develop the next-generation infrastructure platform, helping fuel the continued growth of mobile Internet traffic and cloud computing technology in China," said Shang Hsiao, 21Vianet's CFO.

Lei Jun, a notable Chinese angel investor and co-founder of Xiaomi, holds an approximately 15% stake in Hong Kong-listed Kingsoft. Lei also is a former CEO of the company.

Listed in the US, 21Vianet provides network, cloud infrastructure, content delivery, broadband and business virtual private network (VPN) services. It operates in 44 cities in China, servicing more than 2,000 customers ranging from internet companies to small and medium-sized enterprises.

21 Vianet received several rounds of venture capital investment before going public in 2011. The company posted revenues of RMB1.45 billion ($236 million) in 2013, up from RMB1.1 billion in 2012. However, a net profit of RMB57.7 million in 2012 turned into a loss of RMB47 million in 2013.

The transaction is expected to close next month.

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• Topics
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