Nov. 3, 2009 (Business Wire) -- CDC Global Services, a wholly-owned subsidiary of CDC Corporation (NASDAQ: CHINA) and a provider of consulting, IT and IT-enabled professional services, announced today it has executed a term sheet with the Nanjing High-Tech Zone (Nanjing New & High Technology Economic Development Corporation) to acquire a 35 percent stake, with an option for up to a 51 percent stake, in Sowell, known also as the platform of Jiangsu Microsoft Technology Center, that is expected to help fuel CDC Global Services’ rapid expansion in the growing IT outsourcing (ITO) services market in China.
Sowell operates its ITO businesses, which also include R&D outsourcing services, in Nanjing, Wuxi, Suzhou and Huaian and was the exclusive technology base of Microsoft in Jiangsu Province. Jiangsu Microsoft Technology Center, is a major Microsoft Technology Center where it provides research and development services to Microsoft.
This investment is part of CDC Global Services’ plans to build more IT and R&D outsourcing services in China, which the company plans to grow to 5,000 seats in a few years. Sowell provides IT and Research and Development services that complement CDC Global Services’ business which includes IT and business process outsourcing services in India and China. Sowell’s ITO services include onsite and remote IT support/help desk, IT infrastructure planning, custom/offshore application development, network management and administration and application maintenance and support.
“We expect that this planned acquisition will serve as the launch pad for expanding our IT/R&D outsourcing capabilities in China to serve our global clients,” said C.K. Wong, chairman of CDC Global Services. “As part of our acquisition strategy, Sowell is expected to serve as the platform for rolling up other Microsoft Technology Centers and expanding our services throughout China. In addition to Microsoft, Sowell is expected to continue to attract more key clients, which we believe may include national and local government agencies in China as well as local and multi-national companies. This is a key part of our strategy in seeking strategic initiatives that may include acquisitions, partnerships and investments that will help CDC Global Services grow and increase its market share in the high growth outsourcing services market.
“This planned acquisition is part of our strategic initiative to build CDC Global Services into one of the world’s leading R&D and IT outsourcing centers for premier technology companies like Microsoft,” said Wong. “CDC Global Services IT/R&D operations in China can also help serve the outsourcing needs of some of CDC Software’s 6,000 customers worldwide. We believe this strategic initiative will help unlock shareholder value for CDC Corporation shareholders.
