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21Vianet Announces Joint Venture with Warburg Pincus

GlobeNewswire•October 31, 2016
BEIJING, Oct. 31, 2016 (GLOBE NEWSWIRE) -- 21Vianet Group, Inc. (VNET) ("21Vianet" or the "Company"), the largest carrier-neutral internet data center services provider in China, and Warburg Pincus, a leading global private equity firm focused on growth investing, today announced the two companies have signed a strategic investment agreement (the “JV Agreement”) to form a joint venture and establish a digital real estate platform (the “JV”) in China. The JV will be dedicated to pursuing development and acquisition opportunities in the wholesale and built-to-suit segments of China’s data center market.
Pursuant to the JV Agreement, 21Vianet will seed the JV with four existing high-performing IDC assets, valued at over US$300 million, and Warburg Pincus will contribute direct capital and extensive industry network and resources in the real estate sector. Also pursuant to the JV Agreement, 21Vianet will continue to own 51% of the equity interests in the four existing IDC assets while Warburg Pincus will own the remaining 49%. With respect to future projects to be developed by the JV, 21Vianet will initially own 49% of the equity interests and Warburg Pincus will initially own 51% of the equity interests. The transactions contemplated by the JV Agreement are expected to close in multiple tranches in the first half of 2017 subject to the satisfaction of certain conditions.

With strong demand for data center space driven by the exponential growth in data usage and cloud services, the JV will serve as a dedicated vehicle that focuses on wholesale customers and enterprises and an expanded product offering across turn-key data centers, standard modules and built-to-suit solutions. The goal is for the platform to grow to 80,000 to 100,000 cabinets over the next five to seven years.
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