Everbright supports $332m privatization of China's iSoftstone

ChinaAMC Capital Management - an alternative investment platform affiliated to fund management company China Asset Management - was leading the deal but pulled out in February. By this point China Everbright and three other entities, Accurate Global, Advanced Orient and CSOF Technology Investments, were already on board.

According to a regulatory filing, Tianwen Liu, iSoftstone's chairman and CEO, China Everbright and the other three entities will pay $5.70 per share for all outstanding American Depository Shares (ADS). This represents a 17.8% premium to the closing price on June 5 last year, immediately prior to the initial take-private bid being submitted.

Liu and ChinaAMC were originally willing to pay $5.85 per share but reduced their offer to $5.45 per share last November, citing weaker performance. ISoftStone reported a net loss of $1.9 million in the second quarter of 2013, compared to a net income of $3.6 million for the same period of 2012. In addition, total debt jumped from $59 million to $155.5 million over the three months to June.

The new offer is subject to approval from iSoftStone shareholders. The buyer consortium currently controls around 21.9% of the company, including a 10.39% stake owned by Liu and Everbright's 6.31% holding. These shares will be rolled over into the acquisition vehicle, while Liu and Everbright will also put in fresh capital. China Merchants Bank has agreed to be lead arranger for $130 million in debt financing.

AsiaVest Partners provided iSoftstone's $14 million Series A round in 2005 alongside Infotech Pacific Ventures. Both firms also participated in the $45 million Series B two years later, which saw the arrival of Fidelity Asia and Japan's MVC Corporation. China Everbright led a Series C round worth $65 million in 2010.

The company went public in December 2010, raising $141 million.

According to iSoftStone's 2012 annual report, Fidelity Asia and AsiaVest remain significant shareholders, with stakes of 14.4% and 13.4%, respectively.

ISoftStone was founded in 2001 and provides IT services and solutions and business process outsourcing services to companies in China, North America, Europe and Japan, including 89 members of the Fortune 500. It posted a net income of $22.1 million in 2012, up from $19 million the previous year, as revenues grew 34% to $381.1 million.

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• Topics
• Buyouts
• Technology
• Greater China
• China
• Technology
• buyout
• China Everbright