Commercial Agreement Provides Cross-Selling
Opportunities for Both Companies
GDS Holdings Limited (“GDS Holdings”, “GDS” or the “Company”)
(NASDAQ:GDS), a leading developer and operator of high-performance
data centers in China, today announced that it has formed a new
strategic partnership with CyrusOne Inc. (“CyrusOne”)
(NASDAQ:CONE), a premier global data center REIT, through the
execution of a commercial agreement. Furthermore, CyrusOne will
make a $100 million equity investment in GDS that will be used by
GDS to fund development projects across key markets to provide
capacity to sustain its strong sales momentum.
Under the terms of the transaction, CyrusOne will purchase newly
issued unregistered ordinary shares equivalent to 8.0 million
American depository shares (“ADS”) at a price per ordinary share
equivalent to $12.45 per ADS, a 4% discount to the most recent
closing price, for a total investment of $100 million. Each ADS is
equivalent to eight ordinary shares. Following the equity
investment, CyrusOne’s ownership position in GDS issued share
capital will be approximately 8%. In addition, CyrusOne President
and Chief Executive Officer Gary Wojtaszek will join the GDS Board
of Directors. Upon the consummation of the investment by CyrusOne,
the Company has agreed to grant to STT GDC and SBCVC preemptive
rights with respect to future private issuances of equity or
equity-linked securities conducted by the Company anytime in the
next eighteen months, whereby STT GDC and SBCVC will have the right
to subscribe for pro rata portions of any such future offerings
based on their current shareholdings.
This strategic investment and commercial agreement bring
together a targeted focus on two large and fast-growing markets,
the United States and China, creating synergies and efficiencies
for both companies. The two companies will exchange best practices
around sales and marketing, data center design and construction,
supply chain management, customer relationship management, and
operations, leveraging each other’s core competencies to deliver a
compelling and differentiated data center solution to their
customers and assist in their global expansion.
“We are delighted to welcome CyrusOne as our strategic investor
and to execute this commercial agreement,” stated Mr. William
Huang, Chairman and Chief Executive Officer of GDS Holdings. “Our
customer base includes the largest hyperscale companies in China,
and this investment is a meaningful source of capital to fund
development for our growing pipeline of demand. CyrusOne has
nearly 1,000 customers and extended relationships in the US market.
This partnership will help us get access to their large customer
base and enhance our sales to their US-based customers who have
operations in, or would like to expand to China.”
Mr. William Huang further stated, “We have a very successful
on-going partnership with our major shareholder, STT GDC, which is
strongly positioned in the strategically important Singapore and
London data center markets and is the clear market leader in India.
The addition of our partnership with CyrusOne creates a platform
for providing solutions for customers in China and across the most
important Tier 1 markets in Asia, the US and Europe which is a
unique value proposition highly relevant to today’s customer
requirements.”
Gary Wojtaszek, President and Chief Executive Officer of
CyrusOne, said, “This strategic partnership provides a compelling
value proposition for both companies’ customer bases as the
enhanced collective capabilities of CyrusOne and GDS will enable
them to meet their data center resource needs in the world’s two
largest centers of economic activity. We are excited about our
investment in GDS and this partnership between two of the
fastest-growing data center companies and recognized leaders in
serving the hyperscale and enterprise markets in the United States
and China.”
CyrusOne Overview
CyrusOne has developed and operated data centers for more than
17 years and is a market leader in the United States. The
company has 40 data centers totaling 2.6 million colocation square
feet located in Austin, Chicago, Cincinnati, Dallas, Houston,
London, New York Metro, Northern Virginia, Phoenix, Raleigh-Durham,
San Antonio and Singapore. CyrusOne has nearly 1,000 customers,
including 190 Fortune 1000 customers and almost every leading cloud
company in the U.S. Revenue and Adjusted EBITDA grew by 28%
and 30%, respectively, in the second quarter of 2017 compared to
the same period in 2016.
Legal and Financial Advisors
RBC Capital Markets acted as financial advisor and sole
placement agent to GDS in connection with the $100 million private
placement of equity and Simpson Thacher & Bartlett LLP served
as legal counsel. J.P. Morgan acted as financial advisor to
CyrusOne and Sullivan & Cromwell LLP served as legal
counsel.
Joint Conference Call Details
GDS and CyrusOne will hold a joint conference call at 9:00 a.m.
Eastern Time on October 18, 2017 (9:00 p.m. Beijing Time on October
18, 2017) to discuss the transaction. Listeners may access
the call by dialing:
United States: |
1-844-492-3731 |
International: |
1-412-542-4121 |
Hong Kong: |
800-905-945 |
China: |
400-120-1203 |
Callers
should ask to be connected to the “CyrusOne-GDS Holdings Joint
Conference Call” |
|
A telephone replay will be available approximately one hour
after the call until November 1, 2017 by dialing:
United States: |
1-877-344-7529 |
International: |
1-412-317-0088 |
Replay Access
Code: |
10113452 |
|
|
A live and archived webcast of the conference call will be
available on the Company's investor relations website at
http://investors.gds-services.com.
About GDS Holdings LimitedGDS Holdings Limited
(Nasdaq:GDS) is a leading developer and operator of
high-performance data centers in China. The Company’s facilities
are strategically located in China’s primary economic hubs where
demand for high-performance data center services is concentrated.
The Company’s data centers have large net floor area, high power
capacity, density and efficiency, and multiple redundancy across
all critical systems. GDS is carrier and cloud neutral, which
enables customers to connect to all major PRC telecommunications
carriers, and to access a number of the largest PRC cloud service
providers, whom GDS hosts in its facilities. The Company offers
colocation and managed services, including a unique and innovative
managed cloud value proposition. The Company has a 16-year track
record of service delivery, successfully fulfilling the
requirements of some of the largest and most demanding customers
for outsourced data center services in China. The Company’s base of
customers consists predominantly of hyperscale Cloud service
providers, large Internet companies, financial institutions,
telecommunications and IT service providers, and large domestic
private sector and multinational corporations.
Safe HarborThis announcement contains
forward-looking statements. These statements are made under the
“safe harbor” provisions of the U.S. Private Securities Litigation
Reform Act of 1995. These forward-looking statements can be
identified by terminology such as “aim,” “anticipate,” “believe,”
“continue,” “estimate,” “expect,” “future,” “guidance,” “intend,”
“is/are likely to,” “may,” “ongoing,” “plan,” “potential,”
“target,” “will,” and similar statements. Among other things,
statements that are not historical facts, including statements
about GDS Holdings’ beliefs and expectations regarding the growth
of its businesses and its revenue outlook, the business outlook and
quotations from management in this announcement, as well as GDS
Holdings’ strategic and operational plans, are or contain
forward-looking statements. GDS Holdings may also make written or
oral forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission (the “SEC”) on Forms 20-F and
6-K, in its annual report to shareholders, in press releases and
other written materials and in oral statements made by its
officers, directors or employees to third parties. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause GDS Holdings’ actual results or financial
performance to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: GDS Holdings’ goals and strategies; GDS Holdings’ future
business development, financial condition and results of
operations; the expected growth of the market for high-performance
data centers, data center solutions and related services in China;
GDS Holdings’ expectations regarding demand for and market
acceptance of its high-performance data centers, data center
solutions and related services; GDS Holdings’ expectations
regarding building, strengthening and maintaining its relationships
with new and existing customers; the continued adoption of cloud
computing and cloud service providers in China; risks and
uncertainties associated with increased investments in GDS
Holdings’ business and new data center initiatives; risks and
uncertainties associated with strategic acquisitions and
investments; GDS Holdings’ ability to maintain or grow its revenue
or business; fluctuations in GDS Holdings’ operating results;
changes in laws, regulations and regulatory environment that affect
GDS Holdings’ business operations; competition in GDS Holdings’
industry in China; security breaches; power outages; and
fluctuations in general economic and business conditions in China
and globally and assumptions underlying or related to any of the
foregoing. Further information regarding these and other risks,
uncertainties or factors is included in the GDS Holdings’ filings
with the SEC, including its registration statement on Form F-1, as
amended. All information provided in this press release is as of
the date of this press release and are based on assumptions that
GDS Holdings believes to be reasonable as of such date, and GDS
Holdings does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
For investor and media inquiries, please
contact:GDS Holdings Limited Laura Chen
Phone: +86 (21) 2033-0295 Email: ir@gds-services.comThe
Piacente Group, Inc. Ross Warner Phone: +86 (10) 5730-6200
Email: GDS@tpg-ir.comAlan Wang Phone: +1 (212) 481-2050 Email:
GDS@tpg-ir.com
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