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April 22, 2014
MW Transaction Analysis  

iSoftStone Announces Definitive Agreement for Going Private

 

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. 


About martinwolf    

 

                
             San Francisco, CA                                                Bangalore, India

With offices in San Francisco and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in nine countries. We are a five-year member of the Merrill Lynch PS Referral Network, and are a strategic partner of the Enterprise Advisory department of CICC, China's first joint-venture investment bank.

 

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martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.  

 

To learn more about martinwolf, contact Matthew Putzulu at mputzulu@martinwolf.com.

 

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