Chinese provider of content delivery network (CDN) and cloud services ChinaCache is to sell a 79 percent stake in its data center business, ChinaCache Xin Run Technology, for RMB221.2 million ($32.1m) in cash before fees and expenses.

Xin Run will be bought by Tianjin Shuishan Technology, Shanghai Qiaoyong Equity Investment Fund Management Co., and Tianjin Dingsheng Zhida Technology Co, with the companies acquiring 47.67 percent, 26.33 percent and 5 percent of Xin Run, respectively.

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“This transaction will significantly strengthen our balance sheet. In addition, by divesting the majority interest in this capital intensive business, we can focus on our asset-light and technology-driven CDN business,” Song Wang, Chairman and CEO of ChinaCache, said.

“We believe the transaction will enable Xin Run to achieve growth and unlock value, which may further benefit our shareholders. After the transaction, ChinaCache and Xin Run may explore partnership opportunities to provide our enterprise customers with premium total solutions.”

In addition to being CEO of ChinaCache, Wang controls both Tianjin Shuishan and Tianjin Dingsheng.

Tianjin Shuishan, which will become the largest owner of Xin Run, will loan money from Shanghai Qiaoyong or its affiliates to finance its part of the acquisition.

The sale of Xin Run has been agreed upon, but is still subject to the usual closing conditions and regulatory approval. The acquisition has been approved by the Board of Directors, who sought advice from its independent audit committee.