Hillhouse, Boyu in Talks to Invest in GDS Holdings’ Data Centers

(Bloomberg) -- Alternative asset managers Hillhouse Capital, Boyu Capital, and CDH Investments are in advanced talks to invest in GDS Holdings’ data center business outside China, according to people familiar with the situation, sending the company’s shares up as much as 24% in Hong Kong on Monday.

An agreement on a total investment of $500 million to $600 million may be reached as soon as the coming weeks, though no final decisions have been made, the people said, asking not to be identified because the matter is private. Other investors could also be involved in a deal, they said. 

GDS’s shares jumped the most since November 2022 following the Bloomberg News report. They pared the gain to 18% as of 3:36 p.m. in Hong Kong. The company now has a market value of about $1.5 billion. 

Representatives for Hillhouse, a long-term investor in GDS, didn’t respond to a request for comment. Boyu, CDH, and GDS also didn’t respond to requests for comment.  

Shanghai-based GDS is expanding in Southeast Asia and has been contemplating selling a minority stake, Bloomberg reported in February last year.

Private equity firms that traditionally focused on China are increasingly shifting their attention to other areas like Southeast Asia. Last month, Hillhouse bought Singapore-based business services provider InCorp Global from private equity firm TA Associates for an undisclosed amount.

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GDS develops and operates dozens of data centers in cities including Beijing, Guangzhou, Shanghai, and Shenzhen, according to its website. As part of its expansion overseas, it is providing services at a third-party data center in Singapore and building facilities in Malaysia and Indonesia.