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January 20, 2014
MW Transaction Analysis  

AsiaInfo-Linkage Inc. Announces Completion of Merger

Financial Overview
  • Total Transaction Size:                                                  $819 Million
  • Implied Enterprise Value (EV):                                      $574 Million
  • EV/LTM Revenue:                                                           1.2x
  • EV/LTM EBITDA:                                                             5.4x            

Transaction Facts

  • AsiaInfo-Linkage, Inc. (NASDAQ: ASIA) a China-based provider of telecommunication software and services, announced Wednesday the completion of its merger agreement with an investor consortium led by CITIC Capital Partners to be taken private. The company will delist its shares from NASDAQ.
  • AsiaInfo-Linkage reported that they first received the buyout offer from CITIC in January 2012, and came to an agreement in May 2013.
  • Reports have attributed the length of the transaction to both internal negotiations and a long regulatory approval process.
  • AsiaInfo-Linkage reported revenues of $426.4 million (up 11.6% year-over-year) for the first three quarters, and had forecast fourth quarter revenues of $173-181 million.
  • This is CITIC's sixth take-private transaction.

Joining Others in Going Private to Focus on Expansion and Growth

  • International Growth: The merger enables AsiaInfo-Linkage to focus on expansion and growth. It recently announced a significant win in Europe when it became lead contractor for Telenor Group.
  • A Privatization Trend: The deal is the latest in an ongoing series of privatizations and de-listings of U.S.-listed Chinese companies, which picked up steam after several accounting scandals that led to depressed valuations for Chinese companies with overseas listings. In 2011, after the Longtop Scandal, AsiaInfo-Linkage's share price plunged from $23 to $6.40 and had been unable to reach $15 again.
  • Strategic Move: Going private enables AsiaInfo-Linkage to have more flexibility to complete a transformation to better serve their major clients - China Mobile, China Telecom and China Unicom - which have shifted their focus from infrastructure to business and data monetization.

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 were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies.    


The firm is also a presenting sponsor of the Global IT M&A Forum.   


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