Warburg Pincus, 21Vianet to create China data center platform

21Vianet will seed the platform with four of its existing data center assets valued at more than $300 million in all, according to a release, while Warburg Pincus will contribute capital along with its resources and experience in the real estate sector. The initial four assets will be 51%-owned by 21Vianet, with Warburg Pincus holding the rest. This shareholding pattern will be reversed for future projects.

The two investors expect continued strong growth in internet usage and cloud services to drive demand for data center services. They envision the platform expanding over the next seven years to include as many as 100,000 server racks - capable of holding several million servers - in turn-key data centers, standard modules and custom-built solutions across China.

"Data centers have been one of the best performing real estate asset classes globally and one supported by compelling secular trends in China," said Warburg Pincus Managing Director Ellen Ng. "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 [technology, media and telecom] sectors in China."

21Vianet claims to be one of China's leading carrier-neutral internet data center services providers. Its offers web hosting, cloud infrastructure, consumer broadband and business VPN services. 21Vianet's investors include Temasek Holdings, which has made several investments in the company including a $100 million commitment in 2013 and an investment of $296 million alongside Kingsoft Corporation and Xiaomi in 2014.

In its most recent annual report 21Vianet posted RMB3.6 billion ($561 million) in revenue for the year ended December 2015, up from RMB2.9 billion in 2014. Over the same period the company's net loss grew from RMB115 million to RMB284 million.

Last month, GDS Holdings, a China data center provider backed by SBCVC, Ping An Insurance and Singapore Technologies Telemedia, announced plans to raise up to $269.5 million through a NASDAQ IPO. The company has eight self-developed data centers and also operates 10 smaller data centers owned by third parties.

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• Topics
• Greater China
• Support services
• Technology
• Infrastructure
• Infrastructure
• China
• Warburg Pincus Asia