Data center solutions firm Chindata Group to merge with BCPE Chivalry in $3.2bn deal

Chindata Group Holdings Limited (Nasdaq: CD), a forerunner in providing carrier-neutral hyperscale data center solutions in Asia-Pacific emerging markets, has disclosed its merger agreement with BCPE Chivalry Bidco Limited and its subsidiary, valuing Chindata Group’s equity at an estimated US$3.16 billion.

Enhancing Asia-Pacific’s Data Center Solutions

Chindata Group stands as a pioneer in building state-of-the-art hyperscale data centers in key Asia-Pacific markets, notably China, India, and Southeast Asia. With sub-brands “Chindata” and “Bridge Data Centres” under its belt, the company facilitates vital IT infrastructure in primary economic areas such as the Greater Beijing Area and has a broad client base across major Asia-Pacific countries.

Shareholders to Receive $8.6 per ADS

Under the Merger Agreement terms, each American depositary share (ADS) of the Company will be exchanged for a cash sum of US$8.6, reflecting a 42.6% premium over the ADS closing price on June 5, 2023. This rate exhibits a 7.5% growth from the initial purchase price proposed by the Bain Shareholders on June 6, 2023.

Strong Backing from Major Investors and Financial Institutions

The Bain Shareholders, along with other investors, have shown significant support for the merger, holding a significant 95.26% of the company’s voting power. The merger’s financing will utilize funds from Sponsors, debt financing from major banks such as Shanghai Pudong Development Bank, and equity rollover from the current shareholders.

Merger Awaiting Final Approvals

The company’s board, with recommendations from the Special Committee, has endorsed the merger, directing shareholders towards a favorable vote. The merger’s fruition, scheduled between Q4 2023 to Q1 2024, hinges on meeting conventional closing conditions and other shareholder-related protocols. Once finalized, Chindata Group will transition to a privately-owned entity, removing its ADSs from the NASDAQ Global Select Market.

Advisory Roles in the Merger

Citigroup Global Markets Asia Limited and Morgan Stanley Asia Limited are serving as independent financial advisors, with legal counsels including Gibson, Dunn & Crutcher, Maples and Calder, and others, playing pivotal roles in guiding the merger’s legal intricacies.