Bain forms Asia data center platform

Earlier this year, the GP acquired a majority stake in the data center division of Shenzhen-listed NetScience Technology for RMB990 million ($147 million). This asset – known as ChinaData – has now combined with Bridge Data Centers, which was bought by Bain in November 2017. The goal is to scale up into a region-wide business offering wholesale and custom solutions.

Both TPG Capital and Warburg Pincus are involved in similar endeavors. TPG and Goldman Sachs have led two rounds – worth a combined A$1.25 billion ($868 million) for AirTrunk, a Singapore-based player that has previously outlined plans to spend A$2 billion on Asian expansion. Meanwhile, Warburg Pincus has a data center joint venture with China-focused 21Vianet and invested $300 million in emerging markets platform Princeton Growth Ventures.

ChinData currently has four data centers in China and is developing three new facilities around Beijing and Shanghai with more planned. Bridge Data has two centers in Malaysia – acquired last year from a government investment entity – and a third in India scheduled for launch in early 2020. The combined entity has delivered over 100 megawatts of contract capacity and expects to reach 300 MW within two years.

Bridge Data is said to have $1.5 billion to put towards expansion. Kris Kumar, CEO of Bridge Data, told industry portal Data Economy in May that the deployment target for India alone – set in 2017 – was $400-500 million. He wants to have at least four facilities in the country within three years with a total capacity of 70-80 MW. Kumar added that an announcement would be forthcoming regarding an acquisition in Singapore.

Bain said in a statement that the multi-part deal required “long-term creative thinking and financing over more than three years, beginning with a greenfield development in India, acquisitions in Southeast Asia, and the exploration of the hyperscale opportunity brought about by the massive needs among Internet, cloud and technology companies in China.”

TPG’s most recent investment in AirTrunk comprised equity and senior debt, with the private equity firm participating through TSSP, its dedicated credit and special situations platform. Bain’s investment in the combined ChinData-Bridge Data entity – aside from the initial ChinData acquisition, it hasn’t disclosed the amount of capital committed to the project – also features its private equity and credit arms.

These hybrid structures are in keeping with the description of data centers as part of a sub-class within infrastructure that adds a layer of technological complexity – and a need for PE-style growth equity and value creation – to traditional long-term, yield-driven income streams. This broad trend towards industrial-scale digitization, which also covers smart cities and the internet-of-things (IoT), is blurring the lines that define real assets.

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• Topics
• Greater China
• South Asia
• Southeast Asia
• Technology
• Infrastructure
• China
• India
• Bain Capital Asia