21Vianet Group, a cloud-neutral Internet data center services provider in China and a strategic partner for hyperscalers such as IBM and Microsoft in the Chinese market, has announced that funds managed by investment firm Blackstone have agreed to make a $150 million investment in 21Vianet. As a result of this investment, Blackstone will become one of the company’s largest institutional stockholders.

As a carrier- and cloud-neutral Internet data center services provider in China, 21Vianet provides hosting and related services, including IDC services, cloud services, and business VPN services. Customers may locate their servers and equipment in 21Vianet’s data centers and connect to China’s Internet backbone. 21Vianet Group operates in more than 20 cities throughout China, servicing nearly 5,000 hosting and related enterprise customers that span numerous industries – ranging from Internet companies to government entities and blue-chip enterprises to small- to mid-sized enterprises.

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This investment is intended to further strengthen the balance sheet of 21Vianet and help support the rapid growth that 21Vianet is experiencing in wholesale and enterprise data center markets. 21Vianet intends to use the proceeds from the private placement on capital expenditures to reinforce its position in China’s “hyper growth” data center market.

“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 center sector globally will help us embrace new infrastructure and digital transformation opportunities to better serve our customers.”

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

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. The transaction is subject to the satisfaction of customary closing conditions.

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

“Josh and the management team have successfully built 21Vianet into one of China’s leading Internet data center 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.”

Blackstone is one of the world’s leading investment firms. Their asset management businesses, with $538 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis.

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