SBCVC-backed GDS targets $269.5m in US IPO

The company plans to sell 19.25 million American Depository Shares (ADS) for $12-14 apiece, according to a filing. Underwriters could purchase a further 2.88 million shares for sale in the event that demand for the offering proves strong.

SBCVC holds an 18.1% interest in the business, having participated in a $23 million Series A round for GDS in 2007 and a $9 million Series B in 2011. The International Finance Corporation (IFC) co-invested on both occasions but transferred its holding to SBCVC in 2014. The VC firm's stake will be diluted to 15.7% on completion of the IPO, although its voting power would be 5.3% due to GDS' dual class share structure. Should the company achieve an IPO price of $13 or above, SBCVC is eligible to receive additional shares.

Ping An Insurance has a 9.1% interest, which will fall to 8.4% (3% in terms of voting power), while Singapore Technologies Telemedia (STT) - a global data centers player that invested $247 million in GDS in 2014 - will be diluted from 45.1% to 40.9% (14.1% voting power). STT also qualifies for more shares under the same provisions as SBCVC.

A further 7.6% of the company is owned by shareholders of EDC, a China data center infrastructure services provider acquired by GDS in 2014. They own class B shares alongside the GDS management team, and therefore hold 42.4% of the aggregate voting power.

GDS was established in 2006 and had eight self-developed data centers covering 39,781 square meters as of June. It also operates 10 smaller data centers owned by third parties. According to 451 Research, the company is the largest service provider in China's high-performance carrier-neutral data center services market, with 19.7% market share in 2015. It serves more than 300 customers, including internet companies, financial institutions and telecommunications and IT services providers.

GDS posted RMB703.6 million ($105.9 million) in revenue for 2015, up from RMB468.3 million the previous year. EBITDA rose from RMB38 million to RMB164.7 million over the same period, while net losses narrowed from RMB130 million to RMB98.6 million.

Credit Suisse, J.P. Morgan, Citi, RBC, China Renaissance and Credit Agricole are underwriting the offering.

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• Topics
• Greater China
• IPO
• Technology
• China
• Exit
• Softbank China Venture Capital