BEIJING, Aug. 10, 2012 /PRNewswire-Asia/ -- VanceInfo
Technologies Inc. (NYSE: VIT) ("VanceInfo") and hiSoft Technology
International Limited (NASDAQ: HSFT) ("hiSoft") announced today
that they have signed a definitive merger agreement, under which
the companies will be combined in a tax-free, all-stock merger of
equals with a combined equity value of approximately US$875 million. Under the terms of the
agreement, VanceInfo and hiSoft shareholders will each own
approximately 50% of the combined company. hiSoft will be the
surviving listed company in the merger, and its shares will
continue to be listed on the NASDAQ Global Select Market. A new
name for the combined company will be announced in due course.
Under the agreement, each outstanding ordinary share of
VanceInfo will be exchanged for the right to receive one common
share of hiSoft, and each American Depositary Share of VanceInfo
("VanceInfo ADS"), each of which represents one VanceInfo ordinary
share, will be exchanged for the right to receive one American
Depositary Share of hiSoft ("hiSoft ADS"). Immediately prior
to the merger, hiSoft will effect a 13.9482-to-1 share
consolidation and change the ratio of hiSoft ADSs representing
ordinary shares from one ADS for 19 shares to one ADS for one
share, which effectively implies in a 1-to-1.3622 hiSoft ADS
split. These changes are designed to ensure that hiSoft and
VanceInfo will have the same number of outstanding shares and ADSs
at the effective time of the merger.
Upon completion of the transaction, Mr. Tiak Koon Loh, the current Chief Executive
Officer of hiSoft, will assume the role of Chief Executive Officer
of the combined company, while Mr. Chris
Chen, the founder and current Chairman and Chief Executive
Officer of VanceInfo, will assume the role of Non-Executive
Chairman. The board of directors of the combined company will
consist of four directors selected by VanceInfo and four directors
selected by hiSoft.
The strategic combination will create a combined company with
expected 2012 revenue of over US$670
million, which will be the largest China-based offshore IT services provider
based on industry market research reports. The combined
company will have the scale and diversity to compete on a global
basis, with a stronger customer platform created by the
complementary customer bases of hiSoft and VanceInfo, an enlarged
and diversified asset portfolio, an extended business pipeline and
a strong balance sheet and cash flow profile. Customers of
the combined company will benefit from an expanded pool of
consultants and engineers around the world with a commitment to
superior customer service and a highly experienced management team
from both companies with extensive industry knowledge and
experience.
"I am excited to be leading the new company to create
China's global champion in IT
Services. The combined company will be a clear market leader in
serving domestic and offshore customers with the largest resource
base, most comprehensive breadth of IT services capability and the
most balanced geographic customer profile," said Mr. Loh. "Our
common vision in building a world class services organization
delivering outstanding financial performance has already helped us
to identify some strong synergistic opportunities for the combined
company. We expect to see significant synergies across a
number of areas including sales, general and administrative costs,
effective utilization of facilities and sharing of future R&D
and capital investments."
"VanceInfo and hiSoft are pioneers in China IT Services who have built strong, loyal
customer bases," said Mr. Chen. "The joint company can take
advantage of the strong market growth opportunities while
continuing to attract the best people. Our broader scope of
capabilities leveraged across a deeper sales force will also open
ample new business development opportunities. This combination will
be perfectly placed to address my vision since the founding of
VanceInfo to build an unrivalled leader in China IT Services serving the global market.
As Chairman, I look forward to working with Mr. Loh and the
management team to deliver this vision."
The combined company will employ over 23,000 people across 13
locations in China and 14
additional locations worldwide. It will serve a global base
of top tier customers, which include some of the largest Chinese
corporations as well as many Fortune 500 companies. Its
vertical areas of strength will include TMT, BFSI, Transport and
Manufacturing.
The companies have identified potential cost synergies, which
are expected to reach 2% of combined revenues within 18 months
after the closing of the transaction. The parties are
developing a defined execution plan and anticipate that the
transaction will be accretive within the first 12 months following
the consummation of the merger.
The strategic combination has been approved by both companies'
boards of directors and is subject to customary closing conditions,
including shareholder approvals by VanceInfo and hiSoft
shareholders. The transaction is expected to close in the fourth
quarter of 2012.
Citigroup Global Markets Inc. acted as financial advisor and
Orrick, Herrington & Sutcliffe LLP acted as legal counsel to
VanceInfo in connection with this transaction. Lazard acted as
financial advisor and Simpson Thacher & Bartlett acted as legal
counsel to hiSoft in connection with the transaction.
Teleconference and Webcast
The companies will host a joint teleconference and webcast at
8:30 a.m. Eastern Time on
August 10 to discuss this
announcement. The teleconference can be accessed by dialing in +1
877 344 7529 within the U.S., or +1 412 317 0088 for international
callers, referencing passcode 10016461. The webcast can be accessed
at the Investor Relations section of the Websites of VanceInfo and
hiSoft.
About VanceInfo
VanceInfo (NYSE: VIT) is an IT service provider and one of the
leading offshore software development companies in China. VanceInfo's comprehensive range of IT
services includes R&D Outsourcing Services, Consulting and
Solutions Services, Application Management Services and Other
Solutions & Services. VanceInfo provides these services
primarily to corporations headquartered in Greater China, the
United States, Europe and
Japan, targeting high-growth
industries such as telecommunications, technology, financial
services, travel and transportation services, manufacturing, retail
and distribution.
About hiSoft
hiSoft (NASDAQ: HSFT) is a leading China-based provider of outsourced information
technology and research and development services headquartered in
Dalian, China. hiSoft provides its
services to leading companies around the world through a
combination of onshore and offshore delivery capabilities. hiSoft
leverages its skilled technology specialists and client-centric
delivery centers to offer customers reliable and high-quality
technology solutions.
IMPORTANT INFORMATION FOR INVESTORS
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. The proposed merger involving hiSoft
Technology International Ltd. ("hiSoft") and VanceInfo
("VanceInfo") will be submitted to the respective shareholders of
hiSoft and VanceInfo for their consideration. In
connection with the proposed transaction, hiSoft will file with the
Securities and Exchange Commission ("SEC") a registration statement
on Form F-4 that will include a preliminary joint proxy statement
of VanceInfo and hiSoft and will constitutes a prospectus of
hiSoft. hiSoft and VanceInfo also plan to file other
documents with the SEC regarding the proposed
transaction. HISOFT AND VANCEINFO URGE INVESTORS AND
SECURITY HOLDERS TO READ THE PRELIMINARY JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS THAT WILL BE
FILED WITH THE SEC (INCLUDING THE DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS) CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION.
Investors and shareholders may obtain free copies of the
preliminary joint proxy statement/prospectus and other documents
containing important information about hiSoft and VanceInfo
(including the definitive joint proxy statement/prospectus), once
such documents are filed with the SEC, through the website
maintained by the SEC at www.sec.gov.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains "forward-looking statements" within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 that are not limited to historical
facts, but reflect VanceInfo's and hiSoft's current beliefs,
expectations or intentions regarding future
events. Words such as "may," "will," "could," "should,"
"expect," "plan," "project," "intend," "anticipate," "believe,"
"estimate," "predict," "potential," "pursue," "target," "continue,"
and similar expressions are intended to identify such
forward-looking statements. These forward-looking
statements include, without limitation, VanceInfo's and hiSoft's
expectations with respect to the synergies, costs and other
anticipated financial impacts of the proposed transaction; future
financial and operating results of the combined company; the
combined company's plans, expectations and intentions with respect
to future operations and services; approval of the proposed
transaction by shareholders; the satisfaction of the closing
conditions to, or timing of the completion of, the proposed
transaction; and other factors with respect to hiSoft, VanceInfo or
the proposed transaction that are set forth in the "Risk Factors"
section and other sections of hiSoft's and VanceInfo's Annual
Reports on Form 20-F and other SEC filings. All
forward-looking statements involve significant risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements, many of which are
generally outside the control of VanceInfo and hiSoft and are
difficult to predict. All subsequent written and oral
forward-looking statements concerning VanceInfo, hiSoft, the
proposed transaction or other matters and attributable to VanceInfo
or hiSoft or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements
above. Neither VanceInfo nor hiSoft undertakes any
obligation to publicly update any of these forward-looking
statements to reflect events or circumstances that may arise after
the date hereof.
For Investor and Media Contacts
Ross Warner
hiSoft Technology International Limited
Tel: +86-10-5987-5865
Email: investor_relations@hisoft.com
Sheryl Zhang
VanceInfo Technologies Inc.
Tel: +86-10-8282-5330
E-mail: ir@vanceinfo.com
SOURCE VanceInfo Technologies Inc.