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"Change before you have to."

-Jack Welch

April 22,2014

iSoftStone Announces Definitive Agreement for Going Private

martinwolf Transaction Analysis

Financial Overview

  • Transaction Size: $426.4 million
  • Enterprise Value: $413.2 million
  • EV/LTM Revenue: 1.0x 
  • EV/LTM EBITDA: 16.2x

Transaction Facts  

  • On April 18, iSoftStone (NYSE:ISS) CEO and Chairman Tianwen Liu announced a definitive agreement to acquire a 78.1% stake in iSoftStone Holdings for $5.70 per American depository share from its current investors and shareholders. Liu and the buyer group he represents already owns the remaining 21.9% stake in the company.
  • The agreed-upon price represents a premium of 17.8% over iSoftStone’s closing price on June 5, 2013, the last day before the company announced Liu’s first take-private proposal, and a premium of 11.5% over the company’s closing price before the agreement was announced.
  • Liu first proposed a full acquisition of iSoftStone on June 6, 2013, but the offer was revised after lower than expected performance.

Privatization Wave Continues Among Chinese Leaders

  • Joining Peers In Private Reform: With this definitive agreement, iSoftStone joins peers Pactera and AsiaInfo-Linkage in turning to privatization as a means of effecting a necessary transformation in their business without quarterly supervision.
  • Pivoting to Meet Changing Demand: iSoftStone, an IT services and solutions provider, recognizes the need to cater to a changing market demand by addressing growing global demand for cloud and big data solutions.
  • Market Supports Privatization Move: Since iSoftstone first announced their take-private plans in June 2013, their share price jumped up and remained at a level close to the proposed acquisition price despite a recent sharp downturn in most Chinese technology stocks – showing a consistent confidence by the market in the success of the transaction.

For more information, read the press release here.

 

martinwolf was not the advisor in this transaction.

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