London, 27 August 2019 – A 24.01% stake in Global Switch Holdings Limited (“Global Switch” or “the Company”), has been acquired by Jiangsu Shagang Group Co., Ltd (“Shagang Group”), the largest privately owned steel maker in China and a member of the Fortune Global 500 list of the world’s biggest companies. Global Switch is the leading owner, operator and developer of large scale network dense, carrier and cloud neutral multi-tenanted data centres in Europe and Asia-Pacific. The stake has been acquired from Aldersgate Investments Limited, a Reuben Brothers company, in a transaction valued at £1.8bn.
The investment by Shagang Group, through an indirect wholly owned investment vehicle, increases its equity stake in Global Switch to 49.9% on a look through basis, making it the largest shareholder in the Company. Shagang Group had previously acquired indirect stakes in the Company through its participation in the Elegant Jubilee Limited and Strategic IDC Limited consortia of institutional and private investors, which invested in Global Switch in December 2016 and July 2018. Following the transaction, Aldersgate Investments Limited has now fully exited its equity participation in Global Switch. Aldersgate acquired full control of Global Switch in 2007. The company has transformed into a truly global business through a strategic investment programme, with Aldersgate’s continuous support.
Shagang Group has long been renowned as a leader in steel manufacturing, which supports the traditional economy. Shagang Group already has a number of successful international investments outside of China, including businesses listed on the Australian Stock Exchange. This further investment in Global Switch is part of Shagang Group’s ongoing strategy to diversify its asset base into technical infrastructure supporting the new economy and demonstrates its continued confidence in Global Switch and its management team. Shagang Group believes that Global Switch’s super prime data centre assets will continue be at the forefront of a data-led global economy of the future.
The investment by Shagang Group reaffirms Global Switch as one of the most highly valued data centre businesses in the world and represents further support of the Company’s strategic expansion plans in preparation for a public listing, subject to market conditions, on a leading international stock exchange.
Global Switch has a clearly defined strategy of developing new data centres in existing and new super prime locations in Tier 1 markets. The transaction follows the completion in December 2018 of Global Switch’s twelfth data centre, Singapore Woodlands, in partnership with China Telecom Global Ltd, one of the world’s largest providers of integrated telecommunication services and Daily-Tech, a developer and operator of data centre infrastructure across China. Global Switch is scheduled to complete the next phase of its data centre development in Hong Kong later this year and also has new data centres currently under construction in Frankfurt, Amsterdam, and an additional planned facility in London.
Following the transaction, Shagang has confirmed there will be no changes to the strategic direction, management or financial and operational policies of Global Switch, reflecting its continued confidence in the business model, strategy and management team.
John Corcoran, Chief Executive Officer of Global Switch, and David Doyle, Chief Financial Officer, remain as Executive Directors of the Company. Together with the existing management team they will continue to lead and manage the Company.
From a customer perspective, all existing contacts will remain the same. The Company will continue to provide its market-leading service and solutions across its global platform.
The following representatives of Shagang Group have been appointed to the Board of Directors of Global Switch as Non-Executive Directors:
Simon Reuben and Alexander Bushaev, representatives of Aldersgate Investments Limited, have tendered their resignations from the Board with immediate effect following the sale of Aldersgate’s equity position.
Following the changes, the Board will comprise six directors: He Chunsheng, John Corcoran, David Doyle, Shen Qian, Nie Wei, and Li Qiang.
Strong corporate governance and security control arrangements will remain in place through a new Shareholders’ Agreement to which Global Switch is a party, providing for the effective management and operation of the Company and to ensure on-going compliance with the Company’s existing reporting obligations.
Global Switch is the leading owner, operator and developer of large scale network dense, carrier and cloud neutral multi-tenanted data centres and has no access to customer computer equipment or data. It does not provide any IT services to its customers, rather it develops and operates high quality, technical digital infrastructure with access to the power, cooling and physical security, generally required by IT services providers. It then contracts space and power to its customers who fit out their own secure cages with their servers. These cannot be accessed by Global Switch or its investors.
Shagang Group is already party to the existing Security Control Agreement, a security arrangement which Global Switch has had in place for many years. This restricts unauthorised physical access to the data centre sites and ensures that the highest levels of security continue to be in place. Global Switch operates to world class security standards and 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.
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. Earlier this month Moody’s reaffirmed its Baa2 rating for the Company.
There will be no change to any of Global Switch’s financing arrangements as a result of this transaction.
John Corcoran, Chief Executive Officer of Global Switch, said:
“We are delighted that the Shagang Group, one of China’s leading private companies, with a track record for investment acumen, manufacturing and service excellence, has acquired a further 24.01% stake in Global Switch and we welcome the new Board director representatives. This further investment is a continued testament to the quality of the Company, strong track record of financial performance and super prime locations.
“This follow-on investment by Shagang Group is also a further endorsement of our strategy and the exciting future at Global Switch as we move towards an IPO of the Company on a major international stock exchange, subject of course to market conditions. 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.
“On behalf of the Board, I would also like to extend our gratitude to the Reuben brothers for their vision, investment and unstinting support for Global Switch for more than a decade, during which time it has been transformed into a truly global company.”
Shen Wenrong, Chairman of Shagang Group, said:
“We are delighted that Shagang has completed further investment in Global Switch. Our investment in the digital centre industry not only complies with the China’s Belt and Road initiative, but also coincides with the development direction for our own transformation and upgrade. Global Switch is perfectly placed to service global customers from east and west in an increasingly data-led global economy, where Global Switch is already playing a critical role in delivering services to both national and international customers in Hong Kong. Shagang will make full use of its own global resources and take full advantage of the excellent management team of Global Switch, to support Global Switch in achieving great progress and high-quality growth worldwide, especially in the Asia-Pacific Region.”
A spokesperson for the Reuben’s’ said:
“We are delighted to have agreed this transaction with Shagang Group and want to thank them for their partnership and support. We have the greatest of respect for Chairman Shen, his family and advisers with whom we have forged an important relationship. We also extend our thanks to Mr Li Qiang who played an important role in the sale process, having brought together the consortium of investors for the initial tranche of shares sold. Global Switch is an incredible business and as we exit our investment after more than a decade, we wish Shagang and the management team, led by John Corcoran, every success for its next phase of growth and look forward to a continued relationship with them all into the future.”
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Notes to editors:
About Global Switch
Global Switch is the number one large-scale carrier neutral data centre provider in the top ten markets in Europe and Asia Pacific. We own and operate 12 fully fitted world class data centres in super prime locations within eight markets across Europe and Asia Pacific, offering a total of 365,000 sqm of state of the art technical space with further developments underway.
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 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 a leading owner, operator and developer of large scale network dense, carrier and cloud neutral multi-tenanted data centres. It has no access to any customer data. It does not provide any IT services to its customers, rather it develops and operates high quality, technical digital infrastructure with the access to the power, cooling and physical security required by IT services providers. It then contracts space and power to its customers who fit out their own secure cages with their own servers. These cannot be accessed by Global Switch or its investors.
For more information visit: www.globalswitch.com.
About Shagang Group
Jiangsu Shagang Group Co., Ltd is a company established in the People’s Republic of China (PRC), has been a Fortune Global 500 company since 2009 and was ranked 364 in 2018. The Company currently possesses total assets of RMB229.8 billion (£26 billion) and has more than 30,000 employees.
The Company is the largest private steel maker in the PRC engaged in the manufacturing and sale of steel products. Its main products include heavy-wide plate, hot strip, cold strip, wire rod, coiled bar, ribbed bar and special bar quality steel, and it offers over 150 series with 14,000 varieties and 6,000 specifications. With iron and steel manufacturing as its main business, Shagang Group produced 31.8 million tons of iron, 40.7 million tons of steel and 39.5 million tons of rolled products in 2018.
Shagang Group has also expanded into non-steel businesses including resources and energy, trade logistics, finance, steel-related products, investment and real estate. Amongst its resources business interests, Shagang Group holds a 46.68% stake in Grange Resources Limited, an ASX listed iron ore producer in Australia.
Shagang Group serves both domestic and international markets covering Asia, Europe, American, Oceania, Africa and more than 90 countries and regions.
For more information visit: www.shasteel.cn and www.sha-steel.com/eng.