Reuters: Technology News: VanceInfo, HiSoft to merge to create China outsourcing leader

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VanceInfo, HiSoft to merge to create China outsourcing leader Aug 10th 2012, 16:36 Fri Aug 10, 2012 12:36pm EDT (Reuters) - Chinese outsourcing company VanceInfo Technologies Inc and smaller rival HiSoft Technology International Ltd agreed to merge to create what they said would be the largest China-based offshore IT services provider by revenue. VanceInfo and HiSoft shareholders will each own about 50 percent of a company, valued at about $875 million under the terms of the tax-free, all-stock deal, the companies said. Each VanceInfo share will be exchanged for the right to receive one hiSoft share and each American Depositary Share of VanceInfo will be exchanged for the right to receive one 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. "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," the companies said. VanceInfo shares fell 11 percent to $8.83 on the New York Stock Exchange, while HiSoft fell 6 percent to $11.56 on the Nasdaq. HiSoft, with a market value of $373 million as of Thursday closing, will be the surviving listed company, and its shares will continue to traded on the Nasdaq. The combined company is expected to report revenue of over $670 million for 2012, the companies said. HiSoft's CEO Tiak Koon Loh will become the CEO of the combined company and VanceInfo's CEO Chris Chen will take on the role of non-executive chairman after the merger is completed. The deal is expected to close in the fourth quarter. Citigroup Global Markets Inc acted as financial adviser to VanceInfo and Lazard advised hiSoft. (Reporting by Chandni Doulatramani in Bangalore; Editing by Sriraj Kalluvila) Link this Share this Digg this Email Reprints

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