CDC Software Corporation (NASDAQ: CDCS), a global provider of
enterprise software applications and services, today announced that
it has delivered this morning a proposal to Chordiant Software,
Inc. to acquire all the outstanding shares of Chordiant, a provider
of customer experience software and services, in a cash and stock
transaction valued at $105.1 million, or $3.46 per share, based on
a 21 percent premium over the average closing price for Chordiant
shares on NASDAQ over the 30 trading days immediately prior to and
including Jan. 5, 2010.
CDC Software will hold a conference call to discuss its offer
for Chordiant on Friday, Jan. 8, 2009, at 11:00 A.M. EST. Call in
information: USA and Canada Toll Free Number: (866) 903-3296;
Int’l/Local Dial-In #: (706) 643-6263. The conference ID number is
49296888 and the call leader is Mr. Monish Bahl, senior vice
president of Investor Relations.
The transaction, which as proposed is not subject to financing,
but is subject to usual and customary closing conditions and the
receipt of all requisite governmental and shareholder approvals,
provides two options for the payment of consideration. The first
option calls for consideration to be comprised of 40 percent cash
and the remaining 60 percent in a combination of registered shares
of both CDC Software (class A ordinary) and CDC Corporation (class
A common). The second option calls for 50 percent cash and 50
percent in registered CDC Software shares (class A ordinary). CDC
Software expects this offer will be structured in a tax-efficient
manner to help optimize the benefits to the shareholders of
Chordiant. Additionally, Chordiant shareholders can choose either
or both of these two options for the payment of consideration, in
any combination, in 1,000 share increments. As of Jan. 5, 2010, CDC
Software holds 392,762 shares of Chordiant, or approximately 1.3
percent of Chordiant’s 30.4 million shares outstanding.
CDC Software believes the combination between the two companies
would create a compelling front office platform in the enterprise
market, and that CDC Software and Chordiant are synergistic in a
variety of fronts such as their technology, geographic foot print
and customers. For example, CDC Software shares several of
Chordiant’s Top 40 customers that include mutual global marquee
customers like Barclays, ING, Littlewoods, MetLife, Principal
Financial Group, and Wellpoint. As part of its 6,000 customer base,
CDC Software also has many Tier 1, large-scale customers with tens
of thousands of seats, similar to Chordiant’s customer profile.
Furthermore, CDC Software believes that it would provide
Chordiant with the platform to expand globally by leveraging CDC
Software’s large global customer base, cost efficient product
engineering offshore operations in India and China, and its more
than 1,000 partners and resellers worldwide. CDC Software also
believes the combination of the two companies would offer numerous
cross-selling opportunities; result in a significant increase in
annual revenue, with a substantial portion in recurring maintenance
and Software-as-a Service (SaaS) revenue, as well as improve its
already strong adjusted EBITDA margin.
“CDC Software believes this is a superior offer that should be
brought to the Chordiant shareholders for consideration,” said
Peter Yip, CEO of CDC Software. “We believe the combination of CDC
Software and Chordiant, with the numerous synergies in technology,
geographic foot print, and customers, will make a strong technology
marriage and offer a very attractive investment opportunity. For
instance, Chordiant’s call center technology would be a natural fit
with CDC Software’s Front Office solutions, specifically its
Pivotal CRM platform. Both companies have several complementary
vertical markets, and particularly share many common customers in
the financial services market. CDC Software and Chordiant also have
minimal geographic overlap, and CDC Software can provide Chordiant
with the extensive global infrastructure it needs to expand,
especially in Asia. Most notably, based on current projections, the
combination would be earnings accretive immediately. Additionally,
CDC Software can provide the scale that Chordiant has been seeking
in recent months as was evident by its recent acquisition
attempts.”
Moreover, CDC Software operates from a strong financial
foundation. CDC Software recently announced that it achieved more
than a 37 percent increase in quarterly sequential license revenue
and a 30 percent increase in organic license revenue, for the
fourth quarter of 2009. The company has consistently achieved
superior EBITDA margins over the last several quarters including 27
percent in the third quarter of 2009, more than double from the
same period in 2008. CDC Software believes this is indeed a
noteworthy accomplishment considering last year’s downturn in the
enterprise software market.
Most notably, CDC Software holds a proven and successful track
record of successfully integrating acquisitions. Key examples of
this are the company’s acquisitions of two public companies in
2004, Ross Systems and Pivotal Corporation. Since then, both these
businesses have grown significantly under the company’s leadership.
CDC Software believes a primary reason for this achievement is its
global scalable business and technology platform featuring an
infrastructure of multiple complementary applications and services,
domain expertise in vertical markets, cost effective product
engineering centers in India and China and a worldwide network of
direct sales and channel operations. CDC Software expects these
resources can be leveraged significantly to reduce operating
expenses and improve margins in a combined company.
“As a Chordiant shareholder, we have seen first-hand that the
company’s management team and board of directors are experienced,
hard working and have performed their fiduciary duties well under
difficult circumstances. We welcome their continued involvement in
the company and in CDC Software.
“Quite simply, CDC Software believes this is a win-win
transaction for both companies. As a Chordiant shareholder, CDC
Software hopes Chordiant management and their board of directors
will move decisively on approving our offer since it benefits all
stakeholders of both Chordiant and CDC Software,” said Yip.
Investors are invited to listen to a live webcast of the Jan. 8
conference call which can be accessed through the investor section
of the CDC Software website at www.cdcsoftware.com. The call can
also be accessed through www.streetevents.com. To listen to the
call, please go to the website at least 15 minutes prior to the
call and download any necessary audio software.
For those unable to call in, a digital instant replay will be
available after the call until January 15, 2010. Conference ID:
49296888 Encore Dial In #:(800) 642-1687; Encore Dial In #:(706)
645-9291.
About CDC
Software
CDC Software (NASDAQ: CDCS), The Customer-Driven Company™, is a
provider of enterprise software applications and services designed
to help organizations deliver a superior customer experience, while
increasing efficiencies and profitability. CDC Software provides
customers with maximum flexibility in their solutions through
multiple deployment options which best fit their business needs.
Leveraging service-oriented architecture (SOA), CDC Software offers
multiple delivery options for their solutions such as on-premise,
cloud-based or hybrid (blending of the two options) deployment
offerings. CDC Software's product suite includes: CDC Factory
(manufacturing operations management), Activplant (enterprise
manufacturing intelligence), CDC Ross ERP (enterprise resource
planning), CDC Supply Chain (supply chain management , warehouse
management and order management),CDC xAlerts (real-time supply
chain event management), CDC Power (discrete ERP), CDC eCommerce,
CDC NFP/NGO, CDC Pivotal CRM and Saratoga CRM (customer
relationship management), CDC Respond (customer complaint and
feedback management), c360 CRM add-on products, industry solutions
and development tools for the Microsoft Dynamics CRM platform, CDC
HRM (human resources) and business analytics solutions.
These industry-specific solutions are used by more than 6,000
customers worldwide within the manufacturing, financial services,
health care, home building, real estate, wholesale and retail
distribution industries. The company completes its offerings with a
full continuum of services that span the life cycle of technology
and software applications, including implementation, project
consulting, technical support and IT consulting. For more
information, please visit www.cdcsoftware.com.
About CDC Corporation
The CDC family of companies includes CDC Software (NASDAQ: CDCS)
focused on enterprise software applications and services, CDC
Global Services focused on IT consulting services, and outsourced
R&D and application development, CDC Games focused on online
games, and China.com China.com, Inc. (HKGEM:8006) focused on
portals for the greater China markets. For more information about
CDC Corporation (NASDAQ: CHINA), please visit
www.cdccorporation.net.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed transaction,
the CDC Software Corporation, or the company, plans to file with
the SEC a registration statement on Form F-4 containing a proxy
statement/prospectus and other documents regarding the proposed
transaction. The definitive proxy statement/prospectus will be
mailed to shareholders of Chordiant Software Inc.
INVESTORS AND SECURITY HOLDERS OF CHORDIANT SOFTWARE INC. ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS
CAREFULLY WHEN FILED WITH THE SEC IN THEIR ENTIRETY BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION.
Investors and security holders will be able to obtain free
copies of the registration statement and the proxy
statement/prospectus, when filed, and other documents filed with
the SEC by the company through the web site maintained by the SEC
at www.sec.gov. Free copies of the registration statement and the
proxy statement/prospectus (when available) and other documents
filed with the SEC can also be obtained by directing a request to
Monish Bahl, Senior Vice President, Investor Relations (678)
259-8510.
The company and its directors and executive officers and other
persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information
regarding the company's directors and executive officers is
available in its Registration Statement on Form F-1/A (333-160600),
which was filed with the SEC on August 4, 2009. As of January 5,
2010, CDC Software Corporation owns 392,762 shares of Chordiant
Software Inc. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement/prospectus and other relevant materials to be
filed with the SEC when they become available.
Statements in this release that are “forward-looking statements”
are based on current expectations and assumptions that are subject
to risks and uncertainties. Actual results could differ materially
because of factors such as the company's ability to achieve the
synergies and value creation contemplated by the proposed
transaction, the company’s ability to promptly and effectively
integrate the businesses of Chordiant Software Inc. and the
company, the timing to consummate the proposed transaction, and the
diversion of management time on transaction-related issues. For
further information regarding risks and uncertainties associated
with the company’s business, please refer to the “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” and “Risk Factors” sections of the company's SEC
filings, including, but not limited to, its Registration Statement
on Form F-1/A (333-160600), which was filed with the SEC on August
4, 2009, copies of which may be obtained by contacting the
company's Investor Relations department at (678) 259-8510 or at the
company’s website at www.cdcsoftware.com.
All information in this communication is as of January 6, 2010.
The company undertakes no duty to update any forward-looking
statement to conform the statement to actual results or changes in
the company's expectations. Historical results are not indicative
of future performance.
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