Bain seeks delisting of Chindata within three years of listing
Bain Capital has submitted a USD 2.9bn take-private bid for Chindata Group, a largely China-focused data centre operator that it assembled through a buy-and-build and took public in October 2020.
The private equity firm currently holds a 42% stake in Chindata and has 87% of the total voting power by virtue of the dual-class share structure. It is offering to buy all outstanding American Depository Shares (ADS) for USD 8.00 apiece, according to a filing. This represents a 27% premium to the last closing price.
Chindata’s stock peaked at USD 24.00 at the end of 2020 and has since fallen substantially, ending June 6 at USD 6.28. The stock spiked in response to the take-private bid, closing at USD 7.24 on June 8 and giving the company a market capitalisation of USD 2.65bn.
TikTok, a social media platform controlled by China's ByteDance, is Chindata's largest single customer, accounting for 86% of revenue in 2022. US lawmakers are seeking to ban TikTok amid natural security concerns and escalating tensions with China.
While all Chindata’s business operations that involve ByteDance are located in China and Malaysia, the company acknowledged in its most recent annual filing that its products and services would be subject to ByteDance-related restrictions. This could lead to the cancellation of projects or a reduction in the volume of business from ByteDance, which would severely impact profitability.
Bain built the Chindata platform by acquiring a majority stake in the data centre division of China’s NetScience Technology for CNY 990m (USD 147m) in 2019 and combining it with Bridge Data Centers, a Southeast Asia and India-focused player. The company raised USD 540m through a NASDAQ IPO, pricing its shares USD 13.50 apiece.
At the time of the offering, Dutch pension fund manager APG Asset Management and Korean conglomerate SK Group were large external investors in the company, as well as Bain.
Chindata claims to be the largest player in emerging Asia's carrier-neutral hyperscale data centre industry by capacity in service. As of March, it had 898 megawatts of total capacity across 33 data centres. Utilised capacity was 537 MW.
Revenue came to CNY 4.55bn in the 2022 financial year, up from CNY 2.85bn in 2021. Over the same period, net profit rose from CNY 316.4m to CNY 651.6m.
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