Zoyi supports take-private of China's Camelot Information Systems
Zoyi Capital has announced its second deal in a week, completing a $20 million investment in Camelot Information Systems, a US-listed Chinese enterprise application and financial IT services provider.
The private equity firm is supporting a privatization of Camelot led by its management team.
According to a regulatory filing, Zoyi has purchased convertible notes issued by Camelot worth $20 million and has the option to invest an additional $10 million in the company. The proceeds will be used to fund part of the take-private deal as well as cover fees and expenses incurred through this transaction.
Last week, Camelot shareholders voted in a favor of an offer from a group led by Yiming Ma, the company's chairman and CEO, to buy all outstanding American Depository Shares (ADS) at $2.05 apiece. This values the entire company at approximately $95 million.
The transaction is being financed through a combination of rollover equity - participating investors between them control about 34% of Camelot - Zoyi's convertible note and $70 million in debt provided by China Development Industrial Bank.
Founded in 1994, Camelot is the largest domestic provider of SAP-based enterprise resource planning services in China, and also claims to be a market leader in solutions such as teller systems and IT testing for the financial services sector.
The company reported a net loss of RMB256 million ($41.2 million) in 2012, narrowing slightly from RMB263 million the previous year. Revenue rose from RMB1.46 billion to RMB1.6 billion over the same period. Management expects to return to profitability in 2014.
"With this investment, we are excited to increase Zoyi Capital's footprint in the Chinese IT services sector. We believe as a broad-based player that provides various solutions to customers in a wide range of verticals, Camelot is well positioned to capture the secular growth opportunity in China's large and underpenetrated IT services market" said Andrew Kuo, founding partner and CEO of Zoyi.
The PE firm was set up by Kuo, formerly of The Blackstone Group, and Pei-Pei Yu and Eric Chen, who previously worked for Goldman Sachs and Fullerton Financial, respectively. They focus on leading mid-cap companies operating in China and Taiwan, with a preference for buyout or significant minority positions
Last week Zoyi completed its debut deal, paying $30-40 million for a controlling stake in Pink Mary, a Chinese manufacturer and distributor of high-end women's apparel.
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