Mergers & Acquisitions

Chinese science park developer Tus-Holdings eyes expansion with US$388m investment in 21Vianet

PUBLISHED : Tuesday, 24 May, 2016, 8:09pm
UPDATED : Tuesday, 24 May, 2016, 8:09pm

The roll-out of major digital services infrastructure across mainland China is expected to receive a big boost after Tus-Holdings, the Tsinghua University-backed science park developer, acquired a major stake in Nasdaq-listed data centre operator 21Vianet for US$388 million.

“We believe the growth strategies of both Tus-Holdings and 21Vianet are highly aligned and complementary,” Tus-Holdings chairman Wang Jiwu said in a statement.

Wang said the two companies can work together to achieve the common goal of becoming “a leading force in building a digital [services] economy in China”.

Beijing-based Tus-Holdings, through an affiliated investment company, agreed on Monday to pay US$2.712 per ordinary share to take a 21.4 per cent equity ownership in 21Vianet, representing about 51 per cent voting power in the firm. The transaction is expected to be completed next month.

Founded in 1994, Tus-Holdings develops and operates science parks, business incubation centres and technology research and development properties across the mainland. It offers intelligence and financial services, including venture capital investment.

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Its flagship TusPark (Beijing), formerly known as the Tsinghua University Science Park, is currently the world’s single largest university science park, covering 770,000 square metres that houses more than 1,200 multinational and domestic enterprises.

Tus-Holdings directly invests in or controls more than 200 enterprises, including Shenzhen-listed Unisplendour Corp and Hong Kong-traded Tus International.

Last year, Tus-Holdings expanded into Hong Kong with the opening of its nine-storey TusPark innovation space in Kowloon Bay. It is the single largest co-work space for start-ups and entrepreneurs in the city.

Josh Chen Sheng, a co-founder and executive chairman of 21Vianet, said Tus-Holdings’ investment “offers significant strategic value in strengthening our core operations and expanding new business opportunities”.

Chen pointed out that both Tus-Holdings and 21Vianet are committed to “developing a more open, more innovative, next-generation cyberspace infrastructure in China”.

With operations in more than 30 cities throughout mainland China, 21Vianet is recognised as one of the country’s biggest data centre service providers.

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Data centres are secure facilities built to house large-capacity servers and computer-storage systems, and feature multiple power sources and high-bandwidth internet connections. These facilities host cloud services, which allow users to buy, lease, sell or distribute software and other digital resources online, just like electricity from a power grid.

The Tus-Holdings deal followed 21Vianet’s massive fund-raising efforts last month, when it issued convertible bonds worth 1.75 billion yuan to a group of mainland investors.

In a filing with the Hong Kong stock exchange on Monday, Kingsoft Corp said its stake in 21Vianet would shrink to 8.58 per cent, from nearly 11 per cent, after the Tus-Holdings deal is closed.

Software provider Kingsoft, smartphone giant Xiaomi and Singapore-based Temasek had invested a combined US$296 million in 21Vianet in 2014.