Asian investor consortium acquires 24.99% stake in Global Switch in preparation for listing on a leading international stock exchange

Asian investor consortium acquires 24.99% stake in Global Switch in preparation for listing on a leading international stock exchange

Release date: 03.07.2018

A consortium of six Asian institutional and private investors has acquired a 24.99% stake in the Company in a transaction valued at £2.1 billion

The investment by Strategic IDC Limited further diversifies Global Switch’s sources of equity capital, supports a continuation of the Company’s strategic expansion plans in preparation for a public listing in 2019, subject to market conditions, on a leading international stock exchange in Europe, Asia or North America

The transaction follows significant strategic momentum for Global Switch since the December 2016 investment by Elegant Jubilee Limited, a consortium of institutional and private investors from Asia. This includes the launch in December 2017 of Stage 1 of a new state of the art HK$5 billion data centre in Hong Kong and significant progress with the construction of Singapore Woodlands, Global Switch’s second data centre in that location which is due to be completed later this year

There will be no change to the strategic direction, management or financial and operational policies of Global Switch as a result of this transaction

From a customer perspective, all existing contacts, including all our management teams, will remain the same. Global Switch will continue to provide highly resilient and secure data centre services

Aldersgate Investments Limited (a Reuben Brothers company) will continue to jointly control the company together with Elegant Jubilee Limited and Strategic IDC Limited under the governance of the existing Shareholders’ Agreement

Global Switch Holdings Limited ("Global Switch" or "the Company"), a leading owner, operator and developer of large scale, carrier and cloud neutral data centres in Europe and Asia-Pacific, today announces the introduction of a new investor consortium, comprising both new and existing Global Switch investors, to further support the growth of the Company.

Strategic IDC Limited has agreed to acquire a 24.99% stake in the Company for an aggregate cash consideration of £2.1 billion. This payment comprises £1.8 billion for the shares in Global Switch and a further amount of £300 million to Aldersgate Investments Limited. The transaction reaffirms Global Switch as one of the most highly valued data centre businesses in the world.

The Strategic IDC consortium includes follow-on investment from existing Global Switch institutional and private investors including AVIC Trust and the Hong Kong investment arms of Haoyue Capital and Jiangsu Sha Steel Group, the largest private steel maker in China, as well as the introduction of new stakeholders including the Hong Kong regulated China CITIC Bank International, which is providing debt funding to Strategic IDC Limited. As part of the transaction, Li Qiang, the Chairman of Global Switch, will increase his personal stake in Global Switch from 0.7% to 4.8%.

Following the transaction, existing investors, Aldersgate Investments and Elegant Jubilee, will own 24.01% and 51% of the Company respectively and Strategic IDC will own 24.99%.

It is the current intention that Global Switch’s new and existing shareholders, including Aldersgate Investments and Jiangsu Sha Steel Group, will continue to retain stakes in the company in the event of any future IPO.

John Corcoran, Chief Executive Officer of Global Switch, said:

“We are excited to be announcing further investment into Global Switch from high quality institutional investors alongside Aldersgate Investments and Elegant Jubilee. This investment from both new and existing investors, is a clear endorsement of our strategy as we move towards listing Global Switch on an international stock exchange and seek to successfully extend our market leadership positions across Europe and Asia as the data centre provider of choice for new customers from across the globe. We remain proud of our track record in delivering best in class, mission critical data centre infrastructure, world class security and flexibility for all our customers and this remains our priority as we continue to execute on our profitable growth strategy.”

Alexander Bushaev, Director of Aldersgate Investments Limited, said:

“We are delighted to welcome Strategic IDC to join with Aldersgate and Elegant Jubilee as investors in Global Switch. Having first invested in Global Switch in 2006 and supported its global growth and development during that time, we are very pleased to see the company going from strength to strength more than 12 years on.”

Ge Yajing, Director of Strategic IDC, said:

“We’re thrilled to be investing in Global Switch, which is now one of the leading data centre companies in the world. The company’s strong and experienced management team, operational excellence and leading strategic position in Europe and Asia present incredible strategic growth opportunities, particularly in China, where the company is already playing a critical role in delivering services to both national and international customers in Hong Kong as part of China’s Belt and Road initiative.”

Li Qiang, Chairman of Global Switch, said:

“We are delighted that Strategic IDC has acquired a 24.99% stake in Global Switch, while on a personal level, I am pleased to be increasing my own equity stake in the company, reflecting my confidence in the strength of the business and its prospects. The investment from Strategic IDC is a testament to both the quality of the company and the tremendous strategic progress Global Switch has continued to make over the last twelve months. This includes the launch in December 2017 of Stage 1 of a new state of the art HK$5 billion data centre in Hong Kong, two new €500 million bond issuances and significant progress with the construction of Singapore Woodlands, Global Switch’s second data centre in that location and the formation of a game-changing, co-operational agreement with China Telecom Global and Daily-Tech, the leading developer and operator of data centre infrastructure across China."

There is no change to the management of the Company as a result of the transaction. John Corcoran, Chief Executive Officer, and David Doyle, Chief Financial Officer, and the existing management team will continue to manage the day-to-day running of the Company.

Strong corporate governance and security will remain in place:

  • The existing Shareholders’ Agreement will be extended, meaning that all investors - Aldersgate Investments, Elegant Jubilee and Strategic IDC - will jointly control the company. This agreement requires that key decisions must be unanimously agreed by Aldersgate Investments, Elegant Jubilee, Strategic IDC and the management team and this will remain the governance policy until any potential IPO occurs, at which point, publicly listed company governance policies would apply.
  • The Board of Directors includes Li Qiang and Geoffrey Xu representing Elegant Jubilee Limited; Simon Reuben and Alexander Bushaev representing Aldersgate Investments; and Executive Directors John Corcoran and David Doyle. Strategic IDC Limited will also have the right to appoint a Director to the Board.
  • Strategic IDC will join Aldersgate Investments and Elegant Jubilee in signing an existing Security Control Agreement, a standard security arrangement which has been in place for many years and restricts physical access to the data centre sites and ensures that high levels of security are in place. All Global Switch data centres comply with the guidance issued by the UK Centre for the Protection of National Infrastructure as part of the UK government’s national security strategy.

There will be no change to any of Global Switch’s financing arrangements as a result of this transaction. Global Switch remains the world’s highest credit rated data centre provider, with strong investment grade ratings from Fitch, Moody’s and Standard & Poor’s.

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About Global Switch

Global Switch is a leading owner, operator and developer of large-scale, carrier and cloud neutral, multi-customer data centres in Europe and Asia-Pacific. Founded in 1998, Global Switch has a proven business model, demonstrable track record and is the highest credit rated data centre company in the world with investment grade credit ratings from Fitch, Moody's and Standard & Poor's.

Global Switch is a vital and strategic partner for customers that require secure and resilient data centre services with scalable capacity and a high level customer service. The Company's focus is on highly resilient, central, low latency, network dense locations in prime city centre locations and internet hubs close to its customers on the edge of financial and business districts.

Global Switch's data centres operate exclusively in the Tier I markets of Europe and Asia Pacific to Tier III or higher and currently total around 340,000 sq m (3,600,000 sq ft) of floor space. They are occupied by a broad range of customers, global and national, large and small, including government organisations, financial institutions, enterprises, global systems integrators, telecommunication carriers, cloud and managed service providers and other hosting businesses.

Unlike some data centre providers (such as systems integrators and managed service providers that also offer IT and cloud services), Global Switch is essentially a real estate company. It has no access to any customer data – it doesn’t provide any IT services to its customers – it simply builds and operates high quality, technical real estate with the right power, cooling and physical security required by IT service providers. It then leases space to its customers who fit out their own secure cages with their own servers – these cannot be accessed by Global Switch nor its investors.

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About Strategic IDC Limited

Strategic IDC Limited is a BVI registered company and is the investment vehicle of a consortium of Asian institutional and private investors.