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Linkage Technologies withdraws IPO to merge with AsiaInfo

December 7, 2009

Over the weekend, Linkage Technologies (BOSS) announced that it entered into a definitive agreement to merge with its key competitor AsiaInfo (NASDAQ: ASIA), creating China's largest provider of telecom software and IT solutions with $375 million in LTM sales. The news hit just days before Linkage's planned US IPO, which was scheduled to price Wednesday, December 9.

The Nanjing-based company planned to raise $143 million by offering 10.2 million American Depository Shares at a price range of $13.00 to $15.00. Estimated net proceeds of approximately $130 million would have been used for research and development, as well as general corporate purposes. Linkage Technologies was founded in 1997 and booked $122 million in sales over the last 12 months. Citi and Barclays Capital were the lead underwriters for the IPO.

The financial terms of agreement, in which Linkage's current shareholders will receive 26.8 million shares of AsiaInfo plus $60 million in cash, values Linkage at $733 million. The combined entity will be valued at more than $1.8 billion and create a dominant vendor in China's fast-growing $1.3 billion telecom software and IT solutions market.

Linkage Technologies was one of four China-based companies set to complete US IPOs this week.