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chinadotcom Completes Acquisition of Ross Systems
Acquisition of Ross Systems further strengthens chinadotcom's leading position
as a global software player with a strong presence in the fast growing China
market
HONG KONG and ATLANTA, August 27 /Xinhua-PRNewswire-FirstCall/ -- chinadotcom
corporation ("chinadotcom") (Nasdaq: CHINA; Website:
http://www.corp.china.com/), a leading integrated enterprise software and
mobile applications company in China and internationally, today announced that
it has completed its acquisition of Ross Systems, Inc. ("Ross Systems") and
will pay a total consideration of US$65.7 million in cash and chinadotcom
shares to the shareholders of Ross Systems. The strategic acquisition of Ross
Systems strengthens chinadotcom's position as a leading global software
supplier focused on the mid-enterprise market. The acquisition also drives the
expansion of Ross Systems into the fast growing China market leveraging upon
chinadotcom's strong presence in the Greater China region.
The completion of the acquisition of Ross Systems follows the affirmative vote
by Ross shareholders in favor of the merger agreement and the satisfaction or
waiver of certain conditions. At the shareholder meeting, over 2.1 million
votes were received, of which approximately 99% were cast in favor of the
proposed merger agreement. As a result, chinadotcom has acquired 100%, or
approximately 3.5 million, of the outstanding shares of Ross Systems for
consideration of US$41.2 million in cash and US$24.5 million in chinadotcom
shares based upon the closing price of chinadotcom shares of US$4.35 on August
26, 2004. The number of chinadotcom shares to be issued was based on a purchase
price formula which established a value for chinadotcom shares using a 10-day
average closing price of US$4.31. Accordingly, chinadotcom will issue
approximately 5.6 million common shares. Together with 490,000 chinadotcom
shares issued pursuant to executive change in control provisions, these newly
issued shares represent approximately 5.5% of chinadotcom's 110.9 million
common shares outstanding following the transaction.
In addition, chinadotcom incurred estimated transaction costs of approximately
US$1.2 million and executive severance payments of approximately US$2.1 million
and assumed all outstanding stock options of Ross Systems.
Because the 10-day average closing price of chinadotcom shares was below
US$8.50, chinadotcom was able to increase the amount of cash and decrease the
number of chinadotcom shares to be received by Ross Systems shareholders who
elected to receive US$19.00 in a combination of cash and chinadotcom shares as
merger consideration. As a result, those shareholders will receive US$11.90 in
cash and US$7.10 in chinadotcom shares (or 1.647 chinadotcom shares) for each
share of Ross Systems common stock. This represents the maximum amount of cash
and minimum amount of chinadotcom shares allowed by the terms of the merger
agreement.
According to Keith Oliver, chinadotcom's Chief Financial Officer, "We believe
that it is in the best interest of chinadotcom and its shareholders to minimize
further dilution of our total shares issued. Therefore, we have elected to
exercise our option to increase the cash portion of the US$19.00 consideration
to the fullest extent permitted under the merger agreement."
Dr. Raymond Ch'ien, Executive Chairman and Acting Chief Executive Officer of
chinadotcom commented, "The acquisition of Ross Systems marks the successful
completion of an important chapter in our strategic program to build a
sustainable mid-market focused enterprise software business that is global in
reach and with strong growth potential in the Asia Pacific Region. It gives me
great pleasure, following our acquisition of Pivotal earlier this year, to
welcome everyone at Ross Systems to the chinadotcom fold. There is much
integration work to do, but we are confident of achieving a sustained takeoff."
Dr. Ch'ien continued, "The acquisition represents a strategic transaction that
strengthens chinadotcom's leading enterprise software product portfolio
providing customers worldwide a broad range of mission critical enterprise
software solutions covering ERP (Enterprise Resource Planning), CRM (Customer
Relationship Management), SCM (Supply Chain Management), HRM (Human Resources
Management) and BI (Business Intelligence)."
J. Patrick Tinley, Ross Systems' Chairman and Chief Executive Officer,
commented, "We are excited about the closing of the acquisition. We believe
this merger brings a win-win situation for both chinadotcom and Ross Systems as
it will enable us to access the additional distribution resources of
subsidiaries under the chinadotcom group to accelerate our expansion into the
Greater China region, and provide us with economies of scale in our software
development process that we believe will significantly enhance our competitive
position."
Since the announcement of the merger agreement, synergies have been developed
between chinadotcom and Ross Systems in terms of product development and
cross-selling opportunities. For example, by leveraging chinadotcom's
capabilities in its software development center in Shanghai, chinadotcom is
developing new modules of Ross Systems' flagship ERP product, iRenaissance. On
the cross-selling front, chinadotcom's software division closed two important
ERP deals in China for the iRenaissance product this year. chinadotcom and Ross
Systems anticipate further synergies and cross-selling opportunities to be
realized within the chinadotcom software group going forward.
Ross Systems has established a strong presence in the US and Europe with over
25 distributors worldwide. It has an active customer base of over 1,200
customers including many renowned companies that have implemented the
iRenaissance suite. Ross Systems designed iRenaissance specifically for the
process manufacturing industries. The iRenaissance suite provides deep and rich
functionality, including manufacturing, distribution, financial and supply
chain modules as well as recipe and formula management.
About chinadotcom corporation
chinadotcom corporation (Nasdaq: CHINA; Website: http://www.corp.china.com/) is
a leading integrated enterprise software and mobile applications company in
China and internationally. The company has over 1,600 employees with operations
in over 14 countries.
For more information about chinadotcom corporation, please visit the website
http://www.corp.china.com/ .
About Ross Systems Inc.
Ross Systems, Inc. (NASDAQ:ROSS) delivers innovative software solutions that
help manufacturers worldwide fulfill their business growth objectives through
increased operational efficiencies, improved profitability, strengthened
customer relationships and streamlined regulatory compliance. Focused on the
food and beverage, life sciences, chemicals, metals and natural products
industries and implemented by over 1,200 customer companies worldwide, Ross
Systems' family of Internet-architected solutions is a comprehensive, modular
suite that spans the enterprise, from manufacturing, financials and supply
chain management to customer relationship management, performance management
and regulatory compliance.
Publicly traded on the NASDAQ since 1991, Ross Systems' global headquarters are
based in the U.S. in Atlanta, Georgia, with sales and support operations around
the world. For more information about Ross Systems, please visit
http://www.rossinc.com/ .
Forward Looking Statements
This press release includes certain "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of 1995.
These statements are based on chinadotcom management's current expectations and
are subject to risks and uncertainties and changes in circumstances. All
forward-looking statements included in this press release are based upon
information available to chinadotcom as of the date of the press release, and
it assumes no obligation to update or alter its forward looking statements
whether as a result of new information, future events or otherwise. Further
information on risks or other factors that could affect chinadotcom's results
of operations is detailed in its filings or submissions with the United States
Securities and Exchange Commission, including its Annual Report for the year
ended December 31, 2003 on Form 20-F/A filed on July 8, 2004.
Investor and Press Contacts:
chinadotcom corporation
Jane Cheng, Public Relations
Tel: (852) 2961 2750
Fax: (852) 2571 0410
Email:
Craig Celek, US, VP, Investor Relations
Tel: 1 (212) 661 2160
Fax: 1 (973) 509 8008
Email:
Ross Systems, Inc.
Robert B. Webster, Ross Systems, Inc.
Tel: 1 (770) 351-9600
Email:
DATASOURCE: chinadotcom corporation
CONTACT: Media Relations - Jane Cheng, Public Relations,
+852-2961-2750, or fax, +852-2571-0410, or , Investor
Relations - Craig Celek, Vice President, Investor Relations, +1-212-661-2160,
or fax, +1-973-509-8008, or , both of chinadotcom
corporation; Robert B. Webster of Ross Systems, Inc., +1-770-351-9600,
Web site: http://www.corp.china.com/