VanceInfo Technologies Inc. shares will begin trading Wednesday after the Chinese offshore software developer's initial public offering priced at $8.50 per American Depositary Share, the midpoint of expectations.
According to Securities and Exchange Commission filings, VanceInfo expected the IPO of 7.65 million ADS to price between $7.50 and $9.50 each. Each ADS represents one ordinary share.
VanceInfo plans to use the proceeds from its portion of the IPO for general corporate purposes, including capital expenditures, such as establishing new offices and for funding possible acquisitions.
VanceInfo, a Cayman Islands company with executive offices in Beijing, provides clients research and development services, enterprise products, application development and maintenance, and quality assurance and testing. It primarily serves corporations headquartered in the United States, Europe, Japan and China.
As of Sept. 30, the company's 187 clients included Citibank, Hewlett-Packard Co., International Business Machines Corp., Microsoft Corp., Motorola Inc. and Tibco Software Inc. Microsoft and IBM, VanceInfo's top two clients, accounted for 41 percent of its revenue in the first half of the year, according to the filing.
Chris Shuning Chen co-founded VanceInfo in 1995 and serves as its chairman and chief executive. Chen previously worked as a senior software developer at Great Wall Computer Software & System Co., where he participated in the development of the IBM OS/2 operating system.
For the six months ended June 30, VanceInfo reported earnings of $3.2 million, after paying preferred dividends, compared with $1.4 million in the first half of 2006. During the same period, the company's revenue grew to $25.4 million, from $11.1 million in the prior-year period.
Citi and Merrill Lynch & Co. served as the IPO's lead underwriters. Jefferies & Co. and Susquehanna Financial Group also served as underwriters. The underwriters have an option to buy up to about 1.1 million additional ADS to cover any overallotments.
VanceInfo's ADS will trade on the New York Stock Exchange under the symbol "VIT."
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