CyrusOne Inc. and GDS Holdings Ltd. executed a commercial agreement to market and sell data center space and related services in the U.S. and China.
CyrusOne will purchase up to $100 million of newly issued unregistered ordinary shares of GDS, equivalent to 8.0 million American depository shares, at a price per ordinary share equal to $12.45 per depositary share. The price represents a 4% discount to the latest closing price, with each depositary share equivalent to eight ordinary shares. GDS plans to funnel the proceeds toward development projects that will generate yields at par or exceeding CyrusOne's mid-teens target, according to a release from CyrusOne.
CyrusOne said president and CEO Gary Wojtaszek will join GDS' board of directors.
The deal will give CyrusOne access to over 450 GDS customers in China, including Baidu, Alibaba and Tencent, which are among the country's largest internet and cloud service providers.
J.P. Morgan acted as CyrusOne's financial adviser and Sullivan & Cromwell LLP served as legal counsel.
RBC Capital Markets acted as financial adviser and sole placement agent to GDS in connection with the private placement. Simpson Thacher & Bartlett LLP served as legal counsel to GDS.