chinadotcom to Acquire Ross Systems for 1.11 Times Revenue

Weekly Corporate Growth Report, Jan 12, 2004

The Deal: chinadotcom has signed a definitive agreement to acquire Ross Systems Inc. Under the terms of the agreement, each share of Ross Systems will be exchanged for $5 in cash and a number of chinadotcom common shares equal to $14 divided by the average closing price of chinadotcom shares for the ten day trading period preceding the second trading day before closing. The deal values Ross at approximately $19 per share. The waiting period for the merger under the Hart-Scott-Rodino act has expired, but the closing of the transaction has been delayed by an extended review by the Securities and Exchange Commission. Shareholder approvals are still pending. The deal is currently expected to close in the second quarter of 2004.

Discussion: Ross Systems develops enterprise management software. Company products include applications for accounting, supply chain management, enterprise resource planning, and customer relationship management. The company also provides third-party software for other business functions.

chinadotcom was originally conceived as an Internet portal but has slowly developed into a software and technology services company. Company services include application integration, software development, e-business consulting, online advertising, and media planning. The company was spun off from China Internet, which was created by China's official news agency, Xinhua.