The private equity rush to cash in on Asian data centre demand achieved a new milestone this month when a Beijing-based startup backed by Bain Capital filed for a NASDAQ IPO.
Chindata Group Holdings filed its Form F-1 registration statement with the US SEC on 8 September, moving a portfolio of data centres spread across mainland China and Malaysia a step closer to public capital markets.
“We are the leading carrier-neutral hyperscale data center solution provider in Asia-Pacific emerging markets in terms of capacity in service as of December 31, 2019,” Chindata said in its prospectus, citing figures from Frost & Sullivan. Those numbers pegged the platform with a 21.5 percent share of the carrier-neutral hyperscale facility universe in non-core APAC markets, and a 23.1 percent share of the carrier neutral hyperscale segment in China.
Reports in early September indicated that Chindata aims to raise up to $400 million in its market debut, with the company having achieved a valuation of over $3 billion in its most recent private fund raising in August.
Bytedance Provides Majority of Revenue
The prospectus shows that Chindata took in more than RMB 810 million ($115 million) in revenue during the first six months of this year, judging by its unaudited financials, which marks a 73 percent increase over its pro forma results for the same period in 2019.
From January through the end of June the company suffered a net loss attributable to shareholders of just over RMB 59.4 million, which was down from the RMB 66.2 million shortfall it recorded during the first half of 2019 on a pro forma basis.
The majority of Chindata’s business comes from Bytedance, the gaming company parent of video sharing app Tiktok, which hosts its mainland China video service Douyin on the plaform. Bytedance accounted for 68.2 percent of Chindata’s total revenues in 2019 and 81.6 percent during the first six months of this year. Chindata’s second-largest client is CDN Wangsu, the Internet service of its former parent firm.
The company currently operates one hyperscale data centre in Malaysia’s Cyberjaya, and six more in China, with plans to expand into India.
The company noted that it is the fastest-growing carrier-neutral hyperscale data centre company in Asia Pacific’s emerging markets in terms of capacity in service, with a compound annual growth rate of over 100 percent from 2017 to 2019.
Bain Holds 57% Stake
Bain Capital spent $570 million in May of last year to acquire a controlling stake in Chindata from Shenzhen-listed network infrastructure provider Wangsu Science and Technology Company.
Then in July 2019 the Boston-based firm announced a merger of Chindata with Singapore-based Bridge Data Centres, which had acquired a pair of server farms in Malaysia in 2018 and has plans in the works for a third in India. Bain had acquired a controlling stake in Bridge in 2017.
During July South Korea’s SK Holding was reported by media in Seoul and Hong Kong as having paid $300 million to acquire an 8.9 percent stake in Chindata Group, with that deal valuing the company at $3.1 billion.
Bain currently holds a 57.17 percent stake in Chindata, with Dutch pension fund manager APG having picked up another 10.43 percent and SK Holdings ranking third among stakeholders with 8.94 percent. Another 6.63 percent is held by directors and executive officers.
Asia Data Centres Stay Hot
No date has been declared at this time for Chindata’s IPO, but it comes during a busy period for data centres in the region.
Just last week Hong Kong-based Gaw Capital closed on $1.3 billion in funding for its China-focused data centre platform, with Middle Eastern sovereign fund ADIA emerging as a major backer. In comments to Mingtiandi, Gaw directors have indicated that they now plan to take their data centre initiative regional and are currently scouting for appropriate opportunities beyond mainland China.
Also in recent days, US private equity firm Stonepeak Infrastructure Partners announced that it had teamed up with a group of former senior executives from data centre operator Equinix to launch a new APAC server facility platform. Stonepeak and its team have already raised $1 billion for their new venture which has been seeded with a pair of projects in Japan.