Ninetowns (NINE) has entered into a definitive agreement to acquire a related party of Beijing Baichuan Tongda Science and Technology Development Co., Ltd., a Chinese vertical search engine.

Established in 2004 as a software developer of supply chain, e-commerce and trade solutions, Baichuan has evolved to become a B2B vertical search engine and an independent assessor of suppliers through Baichuan's launch of Yaphon.com in 2006. In addition, Baichuan's Total Quality Sourcing system enables it to build a unique ranking algorithm which can significantly improve search result relevancy. Baichuan has entered into alliances with more than 30 Chinese B2B portals for information on some 1.5 million products available from over 400,000 Chinese suppliers. Baichuan is believed to be the first B2B vertical search engine developed in China, providing it with a first-mover advantage and brand name recognition.

Ninetowns' CEO Shuang Wang commented, "This technology is strategically important for Ninetowns, as it will sharpen our business model and accelerate the development of our B2B business. By integrating Baichuan's pioneering vertical search technology and supplier ranking system, TQS, with the in-depth quality validation process offered by Ninetowns' existing software solutions, for advanced information optimization and indexing, we are confident in our ability to provide our B2B users with efficiently and effectively ranked search results. By positioning ourselves as a B2B search and service provider, we will continue to enrich our B2B search capability with more value-added services to expand the user experience of our customers. Meanwhile, we will continue to seek opportunities to cooperate with other B2B platforms and technology to further increase our service profile."

Ninetowns, through its wholly-owned subsidiary, Ixworth Enterprises Limited, entered into a definitive agreement to acquire 70% of the equity interest of Ample Spring Holdings Limited through the purchase of exiting shares for approximately US$13.5 million and the subscription of new shares for approximately US$13.5 million. As a condition to the closing of the acquisition, Beijing Ninetowns Network and Software Co., Ltd., which is another wholly-owned subsidiary of Ninetowns, will enter into a number of service and other agreements with Baichuan pursuant to which Ninetowns Network will become the exclusive service provider of Baichuan. The completion of the acquisition is subject to customary closing conditions. Subsequent to the completion of the acquisition, Ninetowns Network expects to assign all of its rights under its agreements with Baichuan to a wholly-owned subsidiary to be formed by Ample Spring.

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