CITIC completes $890m take-private

The China-focused buyout fund has agreed to buy US-listed AsiaInfo-Linkage alongside its co-founder at a 53% premium over its 30-day average.

A CITIC Capital Partners-led consortium will acquire AsiaInfo-Linkage for $12 per share, valuing the company at $890 million, according to a company statement. The consortium consists of the China buyout fund, Edward Tian, who is the co-founder and a significant stockholder of AsiaInfo, and affiliates, including CITIC PE and China Broadband Capital Partners II.

The Bank of Taiwan, Cathay United Bank, ICBC International Capital, Maybank Investment Bank Berhad and Nomura International (Hong Kong) Limited have agreed to arrange a debt facility in the aggregate amount of $330 million to provide debt financing for the acquisition, the statement added. 

Buyouts will become the norm rather than the exception in four to five years

Eric Xin, managing director, CITIC Capital Partners

AsiaInfo supplies software and business support systems to technology companies in China and is currently a NASDAQ-listed company. If the transaction is completed, AsiaInfo will be an entirely privately-owned company, with no common stock remaining on the stock exchange. 

The price represents a 52 percent premium on the company’s closing price on 11 January 2012 – the last trading day prior to the CITIC consortium proposing to take the company private; and a 53 percent premium over the 30 trading day average price as of the same date. 

The deal remains subject to approval from AsiaInfo’s stockholders, but has already been approved by its board of directors acting on the unanimous recommendation of a special committee of independent directors. 

The CITIC deal is part of a growing trend of Chinese private equity firms de-listing China-based companies from US stock exchanges. CITIC also led the $3.7 billion take-private of Chinese digital media agency Focus Media from the NASDAQ in December 2012.

Eric Xin, managing director of CITIC, told Private Equity International in an interview recently, “China is going through a fundamental structural turn and pre-IPO investments just can’t get the returns [anymore]. Buyouts will be the norm rather than the exception in four to five years.”