GDS Holdings Launches $250 Million Secondary Offering

GDS is selling shares priced at $45.50 each in an offering that's expected to close on Dec. 10.

Author: Anthony Russo   

GDS Holdings Ltd. (Nasdaq: GDS) has priced its shares for its expected $250 million secondary public offering, sending its stock more than 1% by midday on Friday, to $46.76 per American depositary share.

The Shanghai-based data solutions provider said in a statement yesterday after markets closed that it intends to sell 5.5 million ADSs at $45.50 apiece. That represents a downside of 3% from yesterday's close of $47.15 per share. 

The joint book runners on the offering are J.P. Morgan, RBC Capital Markets, BofA Securities and Haitong International, according to the statement. The underwriters may purchase up to an additional 824,175 ADSs, GDS said.

The majority of the proceeds, $190 million, will be used to acquire three data centers, GDS reported. The remaining amount will be used to invest in land, buildings and other data centers, as well as for general corporate purposes.

Earlier this week, GDS announced it plans to complete the purchase of the three data centers in the first half of 2020. The campus in Shunyi district, where they are located, spans across19,700 square meters.

"The addition of this data center campus adds substantially to our presence in China's largest Tier 1 data center market and expands our relationship with two key hyperscale customers. We have established a successful track record of acquiring data centers that match our criteria and we will continue to pursue opportunities in a disciplined way," William Huang, the chairman and chief executive officer of GDS, said in a statement.

GDS raised $193 million in its initial public offering in New York. According to the company's website, it has more than 610 customers, including internet companies, financial institutions and IT service providers. As of September, GDS operated data centers covering an area of more than 198,000 sqm. It also had 85,000 sqm under construction, its website said.

Last month, GDS said that in the three months through September its revenue was $196.8 million, up 44% year-over-year. Net loss narrowed to $15.2 million, or 2 cents per share, compared with $17.4 million, a year ago.

GDS' secondary share offering is expected to close on Dec. 10.