martinwolf | M&A Advisors today released the first China
Edition of its proprietary MW IT Index®. The China Edition of the Index
was introduced by Founder and President Marty Wolf in a presentation at
the 2012 China International Software & Information Service Fair in
Dalian, China. The Index continually tracks the enterprise value of 28
companies in IT Services and Business Process Outsourcing (BPO) in
China, Hong Kong and Taiwan and compares them to valuations of similar
companies in the United States and India.
According to Wolf, “The IT Services and BPO industry in China is in a
relatively early phase. Enterprise valuations are growing, and the
outlook for the overall industry in China is strong for the next three
to five years based on a increasing domestic demand, continued
international competition and a large and growing global market that
cannot be satisfied by U.S. and Indian companies alone.”
Other key findings include:
Of the three major markets for IT Services – the United States, India
and China – China is the most volatile. In-country financial scandals
and slowing GDP growth have combined to depress valuations. While we
are not expecting a hard landing for the Chinese economy, we do expect
volatility to continue for the next year or so.
Valuations of IT Services companies in China are higher than in the
United States, but lower than in India. India is where the most
competition will come from for Chinese companies in this space for the
foreseeable future, and the United States is a good market for Chinese
buyers of IT Services companies.
Cross-border M&A is the path to maximum value for Chinese IT Services
companies, if done properly.
With its history of successful transactions and tradition of expert
analysis, martinwolf is uniquely positioned to offer
commentary on the global IT marketplace. For a copy of the MW IT Index
(China Edition) report, visit http://www.martinwolf.com/mw-index.
About the MW IT Index
The MW IT Index® is an analysis using securities that are weighted
according to the market value of their outstanding shares. The Index
(U.S. Edition) includes 116 IT companies traded in the U.S. stock
markets (NYSE, NASDAQ, and OTC) that are a composite representative
sampling of enterprise values in the following categories:
1. IT Services & Business Process Outsourcing (BPO) - 52 companies,
including seven in BPO
2. IT Supply Chain Services - 23 companies
3. Software 41 companies, including 16 in SaaS
The Index (China Edition) includes 28 Chinese IT Services and Business
Process Outsourcing (BPO) companies traded in the U.S. (NYSE, NASDAQ,
and OTC), London (LSE AIM), Chinese (SZSE, SHSE, SEHK) or Taiwanese
(TSEC) stock markets that are a composite representative sampling of
The MW IT Index starts on December 31, 2007 with a value of 1000.
With offices in San Francisco and Bangalore, India, martinwolf
is the world’s leading middle market IT M&A advisory. Since 1997, the
firm has completed more than 100 transactions in six countries. Its
knowledge and experience with IT outsourcing and managed services
combined with its disciplined approach, which includes a proprietary,
proven, step-by-step work plan customized for each client, has produced
one of the highest transaction completion rates in the industry.
martinwolf is a member of the Merrill Lynch PS Referral
Network and is an exclusive strategic partner to ICICI Bank, India’s
leading private bank, for acquiring U.S. IT companies. Member FINRA,
For more information, visit http://www.martinwolf.com.