Bain took Chindata private in 2023
Bain Capital has agreed to sell the China operations of the data centre platform formerly known as Chindata for RMB 28 billion ($3.93 billion), marking the largest merger and acquisition deal ever in China’s data centre industry, the US private equity firm said late Wednesday.
The Chinese wing of WinTriX DC Group, as the company is now known, has more than 1GW of capacity across both operational and pipeline projects, with a local consortium led by Shenzhen industrial conglomerate HEC Group set to take over the business after Bain first invested in Chindata in 2018.
“Chindata’s journey reflects Bain Capital’s strategy of partnering with outstanding management teams to build category-defining infrastructure platforms,” said Jonathan Zhu, a partner and chair of China at Bain Capital. “Today, Chindata has evolved into one of China’s leading digital infrastructure platforms, with unmatched scale and technical capabilities. We believe HEC will continue to build on this legacy, bringing its strong industrial capabilities to support the next phase of Chindata’s development.”
The sale to the HEC consortium comes two years after Bain had led a buyout of then-NASDAQ-listed Chindata at a valuation of $3.2 billion. Chindata, which then also included Southeast Asia-focused Bridge Data Centres, had debuted on the NASDAQ in 2020 at a valuation of $4.9 billion.
Competitive Bidding
Bain had been reported to be marketing the Chinese platform in May, with the HEC consortium emerging as the winner after a competitive bidding process, the industrial group said in a statement to the local bourse.
Bain Capital chair of China Jonathan Zhu
With its HEC Technology unit listed on the Shanghai exchange, HEC Group is active in alternative energy, liquid cooling, electronic components and robotics, with the group pointing to synergies with its green energy resources as creating synergies for the data centre acquisition.
HEC Group will contribute RMB 4 billion and its HEC Technology unit another RMB 3.5 billion to the acquisition in return for a 46.7 percent stake in the business. The industrial group is joined in the deal by institutional investors including insurance companies and local government funds, according to the Bain statement.
“Over the past seven years, we have been proud to have partnered with Chindata’s management team to accelerate its growth and enhance its strategic position in the market,” said Bain Capital partner Drew Chen. He added that, “We are confident that under HEC’s leadership, the company will continue to thrive in China’s dynamic data economy.”
ByteDance Links
WinTriX continues to count ByteDance among its clients, according to local media reports, with the Chinese tech giant having accounted for as much as 80 percent of the company’s revenue before the 2020 IPO.
With China clamping down on its tech sector since the cancellation of the Ant Financial IPO in 2020, global investors have curbed their enthusiasm for mainland data centre bets, with shares in Chindata having fallen to under $5 each on the NASDAQ prior to the 2023 buyout, after being priced at $13.50 each at the time of the IPO.
Bain Capital acquired Chindata in 2019 and merged it with Southeast Asia data centre operator Bridge Data Centres later that year.
“This exit underscores Bain Capital’s track record of creating long-term value and supporting AI-driven innovation and sustainable growth,” Bain’s Chen said.
With data centre operations located around Beijing, the Yangtze River Delta and Guangdong province, WinTriX’s China business recorded revenue of RMB 2.61 billion for the first five months of this year, generating net profit of RMB 745 million, according to an HEC statement.
Bridge Stands Alone
As it exits the China data centre market, Bain Capital has been focusing on Singapore-based Bridge Data Centres.
Having operated as a unit of Chindata when that company was still listed on the NASDAQ, Bridge in March this year raised $2.8 billion in bank financing for a regional expansion.
With data centres Malaysia, Thailand and India, Bridge is aiming to establish a portfolio capacity of over 800MW by the end of this year, Mingtiandi understands.
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