Bain Capital to sell China data centre business to Chinese consortium for $3.9 billion

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BEIJING/HONG KONG (Reuters) – U.S. investment firm Bain Capital has agreed to sell data centre operator WinTriX DC Group’s China business to a consortium led by Guangdong Hec Technology for 28 billion yuan ($3.93 billion), the companies announced on Wednesday.

Hec Technology and its controlling shareholder will boost capital in a joint venture by 7.5 billion yuan to partially fund the deal, which will be carried out by a subsidiary of the JV, the firm said in a stock exchange filing.

Institutional investors and local government funds are also part of the consortium, Bain Capital said in a separate announcement.

The acquisition can help Hec Technology expand into the data centre business and strengthen its core competitiveness in the digital economy infrastructure industry chain, the firm said in the filing.

The sale comes as data centre valuations have soared in the last few years, driven by rapid developments of artificial intelligence.

A Bain Capital spokesperson said the Guangdong Hec-led consortium won a competitive bidding process that started in the first half of this year.

Guangdong Hec’s expertise in liquid cooling materials and supercapacitor technology can directly support WinTriX’s high-density AI computing needs, the spokesperson said.

HEC’s green energy resources would also reduce the data centre operator’s core operating costs, the spokesperson said.

The transaction, which is expected to close in the first quarter next year after regulatory clearance, gave the China data centre business an enterprise value of about 36 billion yuan, the spokesperson said.

Bain Capital acquired the predecessor of WinTriX DC Group, formerly known as Chindata Group Holdings, in 2019 and merged it with Southeast Asia data centre operator Bridge Data Centres in the same year.

In August 2023, Bain Capital took Nasdaq-listed Chindata private in a $3.16 billion deal.

WinTriX counts social media giant ByteDance as its largest customer, which contributed 86% of its revenue in 2022, according to a Fitch Ratings report.

Outside China, it also operates data centres in India and Malaysia.

($1 = 7.1215 Chinese yuan renminbi)

(Reporting by Yukun Zhang, Kane Wu and Ryan Woo; Editing by Joe Bavier, Kirsten Donovan and Louise Heavens)