U.S.-based private equity firm, Bain Capital, has reportedly offered to take Chinese data center operator, Chindata Group private.
Reuters reported the Beijing-based firm is being valued at US$ 2.93 billion in a deal with Bain Capital, which already owns a 42.2% stake in Chindata. Bain Capital bought Chindata in 2019 and merged it with its portfolio firm Bridge Data Centers. In 2020, the Nasdaq-listed Chindata raised US$ 621 million in its IPO.
Chindata operates carrier-neutral data centers in China, India and Southeast Asia markets. The company grew on the back of rising demand for digital transformation and the adoption of emerging technologies such as cloud computing, artificial intelligence and the Internet of Things. As a leading player in the industry, Chindata has pledged to use 100% renewable power across its data centers by 2040.
On rising demand, market valuations of data center operators in China are recovering ever since Beijing’s crackdown on Chinese tech companies have reportedly ended. However, political risks remain, as these tech companies have yet to rebound to their peak levels recorded in 2019.
Industry experts warn risks of managing data still linger, as seen in China’s amended Anti-Espionage Law, slated to take effect from July 1 this year. The new law broadens the scope of espionage activities giving more leeway for authorities to carry out investigations by gaining access to data and property.
Chindata shares, which have slipped by more than a fifth of their value this year, rose by more than 10.5% to close at US$ 6.94 on Wednesday trading.