China Merchants Capital is temporarily out, is there still suspense about the "owner" of Qinhuai data?
Author |Zhang Kaijing.
Editor丨Gao Yan.
* |Bronco Finance.
The privatization of a company listed in the United States with a market value of only $3.1 billion has attracted the attention of China Merchants Capital, a subsidiary of China Merchants Group, and China Merchants Capital, which has opened a more qualified company, has lost the battle. Who is the big guy at the poker table?
On December 19th,Bain Capital announced that it has completed the sale of Qinhuai Data (CD.) on December 18o), Chindata ceases trading in the American Depository** with immediate effect and is no longer a listed company.
*:*Bain Capital".
In this regard, Zhu Jia, partner and co-head of Asia private equity at Bain Capital, said that Chindata was formed in 2019 by the merger of two data centers owned and led by Bain Capital, namely Chindata Data, a local data center platform in China, and Bridge Data Centres, which focuses on emerging markets in Asia. After the delisting of Chindata, Bain Capital will continue to support the management in building the best data center in Asia.
Wu Huapeng, CEO of Chindata Group, thanked Bain Capital for its support in greenfield project development and capital market operation over the past five years.
Judging from the statements of both parties, this is a mutually beneficial and win-win deal. But behind the apparent peace, a battle for capital between the two countries broke out around Qinhuai data.
Qinhuai Data is one of the three major independent data center operators in ChinaHolding ByteDance's IDC (Internet Data Center) large order is famous. Because of its unique value, after Bain initially threw a non-binding privatization proposal to Qinhuai Data, China Merchants Capital, which has a state-owned background, followed the bidding and gave a higher ** than Bain. However, in the end, Qinhuai Data accepted Bain's plan.
However, many Internet companies have left a lesson from the past regarding data security supervision and cross-border supervision requirements. In this context, will there be new variables in the future attribution of Qinhuai data?
Founded in 1984, Bain Capital manages approximately $175 billion in assets. It prefers an absolute controlling investment approach, and "M&A-Merger-** is the investment path it is accustomed to."
In 2009, when Huang Guangyu of Gome was taken away by regulators, Chen Xiao, who succeeded him, tried to bring in Bain Capital for debt restructuring, which once threatened Huang Guangyu's position as the controlling shareholder. Gui is the richest man in China, Huang Guangyu relied on the increase in holdings and the temporary "comeback" of his wife Du Juan to win this key equity battle. After this battle, Bain Capital also left a deep impression on many domestic investors.
In 2015, Ju Jing founded Qinhuai Data in Beijing, and the IDC industry it aims at is a typical field with asset-heavy operation attributes. It is characterized by large early investment and long return cycle, and enterprises often face the pressure of loss.
Specifically, nearly half of the market share of China's data center services is held by the three major operators, Ali (9988.).HK), Tencent (0700HK) and other major Internet companies will also build their own data centers, but they will still use third-party data center services at the same time. In addition to Qinhuai Data, GDS is also a representative company in this fieldThe income of this type of company** is generally the rent of the customer's rented cabinets, but it costs a lot of money in terms of electricity, cooling, equipment construction, etcAnd the larger the scale of the computer room, it is generally believed that the gross profit margin will be higher.
That's why Wangsu Technology (300017SZ) became the controlling shareholder of Qinhuai Data in 2016 and chose to sell it two years later. Wangsu Technology has said that through the equity of Qinhuai, the company's capital investment pressure can be reduced, so as to invest in the company's other key layout businesses.
*: Aiqicha.
And it was Bain Capital that took over the shares of Qinhuai Data from Wangsu Technology. In 2019, Bain Capital announced a 5700 million US dollars, setting a record for the largest single financing amount in the domestic data center industry. At this time, Bain Capital has formed absolute control over Qinhuai's data. According to the prospectus, the voting rights of Bain Capital and Jujing before the IPO were 812% and 135%。
Subsequently, Qinhuai Data successfully achieved the listing of the U.S. stock market, and by transferring some of the old shares to institutions such as European Pension** and South Korea's SK Group before the IPO, Bain Capital has recovered part of the investment cost before the listing.
Bain Capital's ambitions don't stop there. In 2022, Qinhuai Data will have another blockbuster news: the founder Ju Jing is out. To this end, the company held a special meetingHe said that Ju Jing left because of a strategic disagreement with the board of directorsJu Jing strives to expand into areas such as original components and power generation, while the board of directors wants to focus on the data center business.
However, there are also voices that Ju Jing did not control the board of directors because of the lack of equity, which is a move by Bain to enhance control.
Regardless of the process, the result is that Qinhuai Data has become the only Chinese concept stock that is fully controlled by foreign investors.
As the founder, Ju Jing single-handedly led the situation that Qinhuai Data became the main leader of ByteDance IDC, and this is also the key to the company's ability to become the head of the industry today, and it is the key to the company's rapid growth after Ju Jing left. In 2018, Qinhuai Data's revenue from bytes accounted for only 33% of total revenue, jumped to 82% in 2020, and reached 86% in 2022. During the same period, the total revenue of Qinhuai Data also soared from less than 100 million yuan to 455.2 billion yuan.
Along with the revenue, there is also the net profit of Qinhuai Data. In 2021, the company will turn losses into profits in an all-round wayNet profit doubled year-on-year in 2022;Net profit in the first quarter of this year increased by 167 year-on-year5%, which has exceeded market expectations for 11 consecutive quarters.
*：wind
Even so, Qinhuai Data's valuation in U.S. stocks is still low for a long time. In terms of stock price, Qinhuai data has fallen nearly 67% since March 2021. Shen Meng, director of Xiangsong Capital, believes that data centers are low-yield businesses, and growth depends on expanding the scale of data center management, which does not belong to the concept of high growth.
This has also become an important background for Bain Capital to start the privatization.
In the context of today's regulatory emphasis on data security, China Merchants Capital, which has a state-owned background, also has ideas about Qinhuai Data. After all, Qinhuai data is related to the data of ByteDance, which occupies an absolute market share in China.
The Data Security Law and the Regulations on Critical Facilities stipulate that if an IDC operator is identified as a "critical information infrastructure operator", the personal information and important data collected and generated by it in the course of its domestic operations shall be stored in China. Where it is provided overseas due to business needs, it must first pass the security assessment of the internet information department. Large-scale data centers and cloud computing platforms are included in the scope of critical information infrastructure. By the end of 2022, Chindata had a total of 32 data centers in operation and under construction, with a total IT capacity of 871MWAmong them, there are 26 domestic data centers, with a total IT capacity of 711MW.
*: Easy View Library.
The stage has been set up, and the two sides have begun to make moves. First, in June, Bain threw out a tentative, non-binding privatization proposal to Qinhuai Data. Of which** is $4 per common share and $8 per ADS share;China Merchants Capital then responded and sold a 4. share of common stock$6, $9 per ADS shareA non-binding offer of $2That's 15% higher than Bain's bid.
In the end, however, Qinhuai Data agreed to Bain Capital's second offer, raising its purchase price to 4. per common share$3, $8 per ADS share6 USD.
Objectively,The ** of this offer is still lower than that of China Merchants Capital, but it also has its advantages. In short, the premise of China Merchants Capital's conditions is that it can raise so much moneyIf you don't melt it, you can't do it. In contrast,Bain Capital has already found a financing partner, and in the proposed agreement, it mentioned that the privatization funds will be partially financed** from the financing provided by the Lujiazui branch of the Shanghai Pudong Development Bank and the Shanghai branch of the Industrial Bank.
*: Qinhuai data bulletin.
This incident caused a certain shock in the industry. Bain Capital has also approached other large state-owned banks, but the banks that eventually cooperated with it were SPD and Industrial Bank.
The outside world believes that this transaction is a sure deal for Bain, and Bain knows the importance of data to China, so after it completes the privatization acquisition, it is likely to complete the investment in Qinhuai Data in the future. This is equivalent to Bain making an acquisition with the help of domestic capital, first financing the purchase of the target from a domestic bank, and then selling the target ** back to China, and making a lot of money from it as soon as it is turned over.
While looking for money, Bain's other actions also revealed his strong position in the privatization deal.
For example, after the announcement of the first offer, Qinhuai Data temporarily set up a special committee to evaluate the privatization agreement, and three of the INEDs had Bain backgrounds, and Thomas Manding also became a member of the latter's board of directors with Bain when he joined Gome.
For another example, as early as the announcement of the offer issued by China Merchants Capital, Qinhuai Data mentioned that "the company has received a letter from shareholder Bain Declaring that it does not intend to give the shares owned by the company to any third party, nor does it intend to carry out any alternative transactions".
In addition, on August 11, the privatization agreement provided by Bain Capital disclosed by Qinhuai Data showed that the shareholding ratio of the consortium led by Bain Capital and others reached 6567%, accounting for 95 percent of voting rights26%。
But it's important to note that being strong doesn't mean Bain can do whatever he wants. Shen Meng said that the board of directors of U.S. listed companies has the fiduciary duty of all shareholdersEven a major shareholder cannot use his position to accept a proposal that harms the interests of other shareholders, otherwise he will be held legally liable.
In other words, in a privatized transaction, all buyers bid fairly. Assuming that the other purchasers do come up with a proposal that is reasonable and attractive enough to other shareholders, then the board of directors cannot refuse to submit the proposal to the general meeting unless the board of directors gives reasonable reasons.
And once it comes to the shareholders' meeting, Bain, as a related party, has to refrain from voting, and everything has to listen to the opinions of the majority of minority shareholders.
Therefore, Qinhuai Data did not choose the plan of investment capital, which is more due toChina Merchants Capital's money needs to be raised in cash, and Bain is ready.
Before the privatization transaction was finalized, there were many possibilities, and various capitals were eyeing it, but there were also some shackles.
Taking China Merchants Capital as an example, it is facing a lot of pressure to come forward alone, and there is an investment exit mechanism behind it.
China Merchants Capital is not a listed company of its own. If it takes the lead in completing the privatization acquisition,Even if Bain Capital agrees to cede the position of majority shareholder, there is no clear exit path for the financiers behind the privatization deal.
Specifically, this exit channel can be roughly divided into two situations: domestic listing and overseas listing, and after privatization, the overseas listing has ended, and there is only one way left to go back to A listing. The previous successful backdoor listing of 360 from the U.S. stock market to A took nearly three years to operate.
In this context,Ideally, a company already listed on the A-share market would come forward to take over, with China Merchants Capital or other financial institutions providing financing, and a large private placement after the privatization of Qinhuai Data was completed. After a series of operations, Qinhuai Data will merge with the original listed company into a new listed company, Bain Capital will no longer be a major shareholder, and the funds involved in the transaction can also exit in an orderly manner through the capital market.
*: Easy View Library.
Importantly, industrial capital is more stable than Bain's. As an investment giant, Bain regards Qinhuai Data more as a high-quality investment target, no matter how it is tossed, selling a ** is the main goal；Industrial capital can not only take over the operation system of Qinhuai Data, but also ensure that its data is safely supervised.
However, companies that meet the criteria are not easy to find. It is best to be a giant whose business intersects with Qinhuai Data, and it must be willing to bear the pressure brought by the merger into Qinhuai on all aspects of the company's management and other aspects. In addition, it is also necessary to consider the feelings of Qinhuai's major customer bytes.
Compared with state-owned or foreign-funded enterprises, private enterprises as server suppliers are the best choice for bytes. If Byte wants to go public in the United States, the regulatory pressure on private enterprises at both ends is relatively low. "There are people in the industry who analyze on social **.
*: Canned Picture Gallery.
But in the end, Qinhuai Data was privatized by Bain & Company in accordance with the previous agreement.
However, the completion of the privatization deal does not mean that the channel for interested investors to negotiate with Bain has been closed. Qinhuai Data is the main data center service provider of ByteDance, and ByteDance, as a domestic Internet giant, has more than 800 million daily active users and users of Douyin alone, and the importance of such a huge number of users to domestic data security is self-evident. Whether it's for strategic or tactical reasons, the company's future is likely to be uncertain.
What do you think of this battle for Qinhuai data?What do you think is the purpose of Bain & Company's privatization of Qinhuai Data?Let's talk in the comment section!