VanceInfo Files for IPO

NEW YORK (AP) — VanceInfo Technologies Inc., an offshore software developer and IT service provider, filed for an initial public offering of American Depositary Shares with the Securities and Exchange Commission Friday.
VanceInfo did not disclose in the filing the expected number or price range of the shares to be sold in the IPO, but indicated the offering price could total up to $120 million. The company noted the total offering price was estimated solely to calculate its registration fee and may change.

VanceInfo, a Cayman Islands company with executive offices in Beijing, China, also reported that a group of shareholders also intend to sell shares in the IPO.

VanceInfo provides research and development services, enterprise products, application development and maintenance, quality assurance and testing, as well as globalization and localization. It serves primarily corporations headquartered in the U.S., Europe, Japan and China.

As of Sept. 30, the company's 187 clients included Citibank, Hewlett Packard Co., International Business Machines Corp., Microsoft Corp., Motorola Inc. and Tibco Software Inc.

For the six months ended June 30, VanceInfo increased its earnings to $3.6 million, from $1.7 million in the first half of 2006. During the same period, the company's revenue grew to $25.4 million, from $11.1 million in the prior year.

VanceInfo said Microsoft and IBM, its top two clients, accounted for a total of 41 percent of its revenue in the first half of the year.

The company said its auditors identified material weaknesses and deficiencies in its internal control over financial reporting of its 2005 and 2006 results. It said it has taken steps to correct them.

VanceInfo plans to use the proceeds from its portion of the IPO for general corporate purposes, including potential acquisitions and capital expenditures, such as for establishing new offices to expand the company's delivery platform.

Citigroup Global Markets and Merrill Lynch are serving as joint bookrunning managers for the IPO. Jefferies & Co. and Susquehanna Financial Group are also underwriting the offering.

VanceInfo plans to list its ADS on the New York Stock Exchange under the symbol “VIT.”

peHUB Note: The company has raised around $32 million in VC funding from firms like DCM, Sequoia Capital and an investment fund affiliated with the Chinese Academy of Sciences.