Blackstone invests $150m in Chinese data centre firm 21Vianet Group

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This investment will further strengthen the balance sheet of 21Vianet and help support the growth that 21Vianet is experiencing in wholesale and enterprise data centre markets.

21Vianet Group (Nasdaq: VNET) has announced that funds managed by investment firm Blackstone (NYSE:BX) have agreed to make a $150 million investment in the company. The transaction is subject to the satisfaction of customary closing conditions.

As a result of this investment, Blackstone will become one of the company’s largest institutional stockholders.

“We are delighted to welcome Blackstone, one of the world’s leading investment firms, to partner with us to fuel our next phase of growth,” said Josh Chen, Founder and Executive Chairman, 21Vianet.

“This investment is a valuable vote of confidence in the strategy being pursued by our team. Blackstone’s experience, connections and knowledge of the data centre sector globally will help us embrace new infrastructure and digital transformation opportunities to better serve our customers.”

21Vianet intends to use the proceeds from the private placement on capital expenditures to reinforce its position in China’s hyper-growth data centre market.

“China’s public cloud is experiencing exponential growth and 21Vianet is positioned to meaningfully accelerate its deployment of data centre capacity,” said Jasvinder Khaira, Senior Managing Director, Tactical Opportunities, Blackstone.

The investors will subscribe $150 million newly issued Series A perpetual preferred shares, which will be convertible into American Depositary Shares (ADS) of the company at the conversion price of $17 per ADS.

“Josh and the management team have successfully built 21Vianet into one of China’s leading internet data centre operators,” said Kishore Moorjani, Senior Managing Director and Asia Head of Tactical Opportunities, Blackstone.

“We have been impressed with their technical capabilities, focus, and deep customer relationships.”

As part of the transaction, Blackstone will designate a non-voting observer to attend meetings of the 21Vianet Board of Directors, subject to maintaining its shareholding at or above a specified percentage threshold.