21Vianet Announces US$150 million Investment from Blackstone

BEIJING, June 22, 2020 (GLOBE NEWSWIRE) -- 21Vianet Group, Inc. (Nasdaq: VNET), a leading carrier- and cloud-neutral Internet data center services provider in China, today announced that funds managed by Blackstone (NYSE:BX) (“Blackstone”), one of the world’s leading investment firms, have agreed to make a US$150 million investment in the Company. As a result of this investment, Blackstone will become one of the Company’s largest institutional stockholders. The transaction is subject to the satisfaction of customary closing conditions.

This investment will 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.”

“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.”

“We are excited to support 21Vianet’s growth plans and look forward to a partnership where we can assist with our global experience in the sector,” said Mike Shang, Managing Director, Tactical Opportunities, Blackstone.

The Blackstone investment in 21Vianet includes the following material terms:

• The investors will subscribe US$150 million newly issued Series A perpetual preferred shares (“Preferred Shares”). 
• The Preferred Shares are convertible into American Depositary Shares (“ADSs”) of the Company at a conversion price of US$17.00 per ADS, or into Class A ordinary shares of the Company at a corresponding conversion price.  The conversion price represents a premium of 11% to the volume-weighted average price of ADSs for the 30 trading days immediately preceding the signing date, subject to customary anti-dilution adjustments.
• The Preferred Shares are not redeemable.
• The Preferred Shares will bear dividend at a rate of 4.5% per annum and rank senior to the Company’s ordinary shares in liquidation.
• 21Vianet will have the right to trigger a mandatory conversion at its election, if its ADSs achieve a specified price threshold at 200% of the conversion price for a specified period.

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.