Bain Capital in Exclusive Talks to Acquire Hong Kong Data Centre Projects for Up to $274M

Bain Capital is set to add another city to its Asia data centre network with the US fund manager in exclusive talks to acquire a pair of Hong Kong projects for up to HK$2.15 billion ($274 million).

Having already established digital infrastructure projects in Malaysia, Thailand, India and mainland China under its portfolio companies, Bridge Data Centres and Chindata, which is now known as WinTriX DC Group, Bain Capital is negotiating to buy a pair of data centre projects currently under construction in Fanling, in the New Territories, from Grand Ming Group Holdings Ltd, market sources confirmed to Mingtiandi on Monday.

Grand Ming had announced the talks for its iTech Tower 3.1 and iTech Tower 3.2 projects in a disclosure to the Hong Kong stock exchange on Thursday saying only that the potential buyer, “is a data infrastructure builder providing hyperscale, tailor-made, and colocation data solutions.” Bain Capital representatives declined to comment.

On Friday, Grand Ming warned in a separate filing to the exchange that it expects to suffer a net loss of HK$280 million for the year ended 31 March. In March, Bridge Data Centres said that it had secured $2.8 billion in senior secured bank financing to expand its network in the region.

First Phase Near Completion

In its announcement to the stock exchange Grand Ming said that the first project, iTech Tower 3.1 is substantially completed, with iTech Tower 3.2 already under construction. Information from industry data provider DC Byte indicates that the two phases of the 185,000 square foot (17,187 square foot) facility will each have a capacity of 8MW. The second phase is expected to be completed within next year.

Grand Ming had acquired the site for the combined nine-storey project in 2020 with the company saying in its stock exchange notice that it would sell the company holding iTech Tower 3.1 for up to HK$1.5 billion while the vehicle for iTech Tower 3.2 would fetch up to HK$650 million.

The iTech Tower 3 project is Grand Ming’s first purpose-built data centre facility after it earlier converted a pair of industrial properties in Tsuen Wan and Kwai Chung for digital infrastructure purposes. The Fanling project is built to hold 1,000 server racks with 5.5 metre (18 foot) slab to slab ceiling heights, and equipped for rack power densities of 5 to 10 kW.

Grand Ming said that it has entered exclusivity for the potential sale of the projects for a period of 90 days with the potential purchaser due to complete financial due diligence on the deal as well ensuring that the land and technical elements of the project are to the potential purchaser’s satisfaction.

The deal also hinges on Grand Ming having secured necessary government approvals and utility connections, among other milestones. In its statement, Grand Ming positioned the sale as a way to bolster its balance sheet. 

“Having taken into account the Group’s current financial position and strategic objectives, the Board considers that, should the Potential Transaction materialise, the net proceeds will enable the Group to reduce its overall indebtedness and thereby improving the financial position of the Group,” the company said. 

Two-Track Approach

Since taking NASDAQ-listed Chindata private in August 2023 in a deal which valued the group at $3.2 billion, Bain Capital has ramped up Singapore-based Bridge, which had operated as a unit of Chindata, in a Southeast Asia push.

In April of this year the company said it would invest $1.2 billion over the next three years to develop digital infrastructure in Thailand’s Chonburi province, east of Bangkok. In October Bridge signed an agreement with Malaysia’s Mah Sing Gropu to expand a data centre project in Selangor state which could reach 200MW in capacity. In Malaysia, the company has facilities in Johor, Cyberjaya and Bukit Jali in the Klang Valley while Bridge has an India project in Navi Mumbai.\

With shares in Beijing-based Chindata having lost most of their value in a broad-based wipe out of US-listed shares of Chinese digital infrastructure companies prior to the buyout, Bain renamed the company as WinTriX DC Group. 

A Reuters report early last month indicated that the private equity firm was marketing WinTrix’ China business in a deal which would value the company at more than $4 billion, with Bain said to have engaged advisors for the potential sale.

Bain had first acquired Chindata in 2019 before merging it with Bridge later that year before listing the combined company on the NASDAQ in 2020 in a $540 million IPO.