NEW YORK (TheStreet) -- Shares of 21Vianet Group (VNET) are up 5.57% to $19.87 after it was reported that the Chinese Internet data center services provider entered into a definitive share purchase agreement with Kingsoft Corp., Xiaomi Corp. and Temasek, valued at $296 million.
21Vianet Group announced today that affiliates of Kingsoft, an Internet based software developer, distributor and service provider, Xiaomi, a leading designer, manufacturer and marketer of mobile devices, and Temasek, a Singapore based investment company, will purchase newly issued shares of 21Vianet at $3 per ordinary share.
Kingsoft, Xiaomi, and Temasek will hold 11.6%, 3.4%, and 13.1% equity ownership of the company, respectively, after the closing of the transactions.
"By partnering with Kingsoft and Xiaomi, not only will we be able to expand the scale of our data center footprint, but we will also be able to develop the next-generation infrastructure platform, helping fuel the continued growth of mobile Internet traffic and cloud computing technology in China," 21Vianet CFO Shang Hsiao said.
Separately, TheStreet Ratings team rates 21VIANET GROUP INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate 21VIANET GROUP INC (VNET) a HOLD. The primary factors that have impacted our rating are mixed--some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and disappointing return on equity."