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Sina To Acquire Crillion

Sina Corporation, an online media company and value-added information service provider for China and for global Chinese communities, announced recently that it has entered into a definitive agreement to acquire Crillion Corp, one of the leading mobile valued-added service providers in China.

The acquisition will add two million paying subscribers to Sina and further solidify Sina's leadership position in China mobile value-added service market.

Based in Shenzhen, Crillion works with job centers around China to provide job referrals via wireless short messaging service (SMS) to a large number of job seekers in China. Building upon this customer base, Crillion has created various popular SMS based mobile communities with members paying between US$0.70 and US$1.00 on a monthly basis. In 2003, Crillion generated approximately US$10.5 million in revenues and US$4.4 million in net income. The rapid economic development in China in recent years has created a large pool of job seekers. According to a report by issued by China's National Bureau of Statistics, based on the 2000 census, China has a total migrant population of over 121 million. A large majority of this population represents job seekers who have relocated to more prosperous cities in search of job opportunities.

Sina will pay approximately US$17.9 million in cash and Sina shares as the first installment upon closing and with the rest paid out on an earn-out basis over the next 2 years. The subsequent earn-out payments after the first installment will be paid out roughly on a 1.5 to 2 times 2004 and 2005 earnings basis respectively, provided that Crillion's pretax net income for 2004 and 2005 is over US$6.7 million and US$13.3 million, respectively. The total consideration has a cap of US$125 million, of which, 60% will be paid in cash and the remaining in Sina shares. The transaction is subject to customary closing conditions including regulatory approvals and is expected to close no later than the second quarter of 2004.

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