CDC Software Corporation Announces Filing of a Registration Statement for an Initial Public Offering of American Depositary Shares - Integrated Solutions

2009-07-17

CDC Software Corporation Announces Filing of a Registration Statement for an Initial Public Offering of American Depositary Shares

HONG KONG, ATLANTA – July 16, 2009 – CDC Software Corporation, a wholly-owned subsidiary of CDC Corporation and a provider of industry-specific enterprise software applications (“CDC Software”), has filed a registration statement on Form F-1 with the U.S. Securities and Exchange Commission (the “SEC”) for an initial public offering (“IPO”) of American Depositary Shares (“ADSs”). Each ADS represents one Class A ordinary share of CDC Software and the estimated price for each ADS offered ranges from $11.00 to $13.00.
The registration statement relating to the ADSs has been filed with the Securities and Exchange Commission but has not yet become effective. The ADSs may not be sold, nor may any offers to buy be accepted, prior to the time the registration statement becomes effective.
“We believe that the IPO will better help to differentiate the CDC Software brand from the other core businesses of CDC Corporation and gives investors a choice,” said Peter Yip, CEO of CDC Software and CDC Corporation. “The planned IPO is part of our previously announced strategic initiatives to focus CDC Software as a pure play enterprise software company. We also believe that the IPO helps to provide CDC Software with its own currency to help strengthen its acquisition strategy so it can continue to build out its enterprise applications and services platform and enables the company to expand into other vertical and high growth emerging markets such as in India and China.”
CDC Software Corporation’s Initial Public Offering Structure
A total of 4,800,000 ADSs of CDC Software will be offered for sale. Of this total, 4,000,000 ADSs will represent newly-issued Class A ordinary shares being offered for sale by CDC Software and 800,000 ADSs will represent Class A ordinary shares being offered for sale by CDC Software International Corporation (“CDC Software International”), a wholly-owned subsidiary of CDC Corporation and the direct parent company of CDC Software. Proceeds to CDC Software from the ADSs sold in the offering are expected to be approximately $43.4 million, and the total proceeds are expected to be approximately $52.1 million, assuming an initial public offering price per ADS of $12.00, which is the midpoint of the estimated public offering price range, and after deducting underwriting commissions and any offering expenses payable by CDC Software or CDC Software International. CDC Software will not receive any of the proceeds from the sale of ADSs by CDC Software International.”
In addition, up to 720,000 additional ADSs (the “Greenshoe”), will be available for purchase by the underwriters to cover over-allotments, at any time within 30 days after the effectiveness of the registration statement. Of such 720,000 additional ADSs, 360,000 ADSs shall be made available by CDC Software Corporation and 360,000 ADSs will be made available by CDC Software International, in equal proportion.
After the offering, CDC Software International will continue to hold Class B ordinary shares of CDC Software. Each Class B ordinary share will be entitled to ten votes per share on any matter brought to a vote of CDC Software shareholders, whereas Class A ordinary shares (which the ADSs represent) are entitled to one vote per share. Accordingly, assuming that the underwriters do not exercise the Greenshoe, after the offering is completed, CDC Software International will hold approximately 83.4 percent of the total outstanding equity interests in CDC Software, but will have approximately 98.1 percent of the total voting power.
Lazard Capital Markets and JMP Securities will act as joint book-runners, and each of Cantor Fitzgerald & Co., Janney Montgomery Scott, Macquarie and Morgan Keegan & Company, Inc. will act as co-managers for the offering.
Financial Implications to CDC Corporation
The impact on CDC Corporation if the offering is completed include (as presented, these metrics assume that the underwriters do not exercise their over-allotment option):
‧ As of the date of CDC Software’s filing of the registration statement, CDC Corporation indirectly owned 100 percent of the outstanding ordinary shares of CDC Software. If the offering is completed, CDC Corporation’s equity interest in CDC Software will be reduced from 100.0 percent to 83.4 percent.
‧ CDC Software would receive net proceeds from the offering estimated to be $43.4 million and CDC Software International would receive net proceeds from the offering estimated to be $8.7 million, assuming an initial public offering price per ADS of $12.00 which is the midpoint of the estimated public offering price range, and after deducting underwriting discounts and commissions and any offering expenses payable by CDC Software or CDC Software Internationa.
The above key metrics are summarized as follows:

Pre-IPO Post-IPO

CDC Corporation’s equity interests in CDC Software Corporation 100% 83.4%

CDC Corporation’s voting interests in CDC Software 100% 98.1%

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES DESCRIBED HEREIN, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE OR JURISDICTION IN WHICH THE OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS BEING ISSUED PURSUANT TO AND IN ACCORDANCE WITH RULE 134 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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