The Stack Archive News Article

CyrusOne forms partnership with Chinese data centre firm GDS

Thu 19 Oct 2017

Data centre real estate investment trust CyrusOne has announced a partnership with leading Chinese data centre provider GDS.

The strategic partnership includes a $100 million (approx. £75 million) investment into GDS which will help the firm to meet demand in the Chinese market.

The commercial agreement which comes as part of the partnership is intended to provide cross-selling opportunities and increase the global presence of both companies. The aim is for the two firms to assist each other in the U.S. and China – CyrusOne and GDS’ respective markets.

The $100 million investment from CyrusOne provides the company with eight million American depository shares (ADSs) in GDS, with each ADS being worth eight ordinary shares. The American firm received these shares for a discount of 4% compared to the most recent closing price.

GDS aims to use the investment to develop projects and build and sustain sales momentum, which it expects will produce returns that will exceed CyrusOne’s targets. As a result of the partnership, CyrusOne president and CEO Gary Wojtaszek will join the GDS board.

On the agreement, Wojtaszek commented: “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 centre resource needs in the world’s two largest centres of economic activity.

“We are excited about our investment in GDS and this partnership between two of the fastest-growing data centre companies and recognized leaders in serving the hyperscale and enterprise markets in the United States and China.”

The deal will present some major benefits to CyrusOne, perhaps most importantly access to GDS customers, including many of China’s key hyperscale companies, including Alibaba and Tencent, both of which have recognised GDS as their preferred data centre provider.

GDS chairman and CEO, William Huang, said: “The investment by CyrusOne is a meaningful source of capital to fund development projects and offer timely, customized deployments for our customers as they capitalize on accelerating growth opportunities. We believe that this strategic relationship will enable both companies to meet strong market demand and generate attractive returns for our shareholders.”


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