CDC Corporation's subsidiary CDC Software Corporation is finally making its initial public offering by offering 4.8 million shares in the USD11.00-13.00 estimated price range in the United States.
"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."
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.
Proceeds to CDC Software from the ADSs sold in the offering are expected to be approximately USD43.4 million, and the total proceeds are expected to be approximately USD52.1 million, assuming an initial public offering price per ADS of USD12.00, 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.
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 are entitled to one vote per share. Accordingly, assuming that the underwriters do not exercise the over-allotment option, after the offering is completed, CDC Software International will hold approximately 83.4% of the total outstanding equity interests in CDC Software, but will have approximately 98.1% of the total voting power.
As of the date of CDC Software's filing of the registration statement, CDC Corporation indirectly owned 100% 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% to 83.4%.