AsiaInfo, Linkage combine to tackle Chinese OSS/BSS market

Chinese telecom software firms AsiaInfo and Linkage Technologies have announced a merger, creating a company worth $1.8 billion (€1.2b).
 
Under the deal announced yesterday, Nasdaq-listed AsiaInfo will pay $60 million in cash and 26.8 million shares to Linkage shareholders.
 
AsiaInfo, headquartered in Beijing and Santa Clara, last year posted income of $18.8 million on revenue of $159 million. Revenue in Q3 this year topped $63 million, up 42% year-on-year, thanks to BSS/OSS contracts from China Mobile and China Telecom and a deal to build a remote device diagnostic system for China Unicom.
 
Nanjing-based Linkage has more than 2,000 employees and last year recorded sales of 1.2 billion yuan ($175 million). It was ranked no. 13 in the 2009 list of China’s top 100 software companies.
 
AsiaInfo's legacy shareholders will hold 64.2% of the stock in the new firm and Linkage's shareholders 35.8%. The new business, which will be called AsiaInfo-Linkage, has a market value of $1.8 billion, based on AsiaInfo’s Friday closing share price, and combined sales this year of more than $400 million.
 
AsiaInfo president and CEO Steve Zhang will hold the same posts in the merged company. He said the merged company’s portfolio would range from system integration and maintenance to consulting.
 
“The combined company's expanded service offering, extensive base of highly skilled engineers, world class R&D capabilities and complementary customer bases will enable us to better service and anticipate our customers' needs.”
 
The company would also explore new revenue opportunities abroad, he said.
 
The new company will have more than 8,000 employees, including 7,000 engineers.
 
The merger has been approved by the boards of both companies and is expected to close by early in the second quarter of 2010.

 

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