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Yucheng Technologies Limited Enters Into Merger Agreement For "Going Private" Transaction

Stocks in this article: YTEC

BEIJING, Aug. 13, 2012 /PRNewswire-Asia/ -- Yucheng Technologies Limited (Nasdaq: YTEC) ("Yucheng," the "Company," "we," "us" and "our"), a leading China-based provider of IT solutions to the financial services industry in China, today announced that it has entered into an agreement and plan of merger (the "Merger Agreement") with New Sihitech Limited ("Parent"), a British Virgin Islands company wholly-owned by Mr. Weidong Hong, the Company's Chairman and Chief Executive Officer, and New Sihitech Acquisition Limited ("Merger Sub"), a British Virgin Islands company wholly-owned by Parent. 

Pursuant to the terms of the Merger Agreement, each of the Company's ordinary shares issued and outstanding immediately prior to the effective time of the merger will be cancelled in exchange for the right to receive US$3.90 in cash, without interest, except for (i) the shares beneficially owned by Mr. Hong, which will be cancelled without receiving any consideration (the "Founder Shares"), (ii) the shares owned by certain of the Company's employees and officers and certain other shareholders (the "Rollover Shareholders"), which will remain outstanding and survive the merger (the "Rollover Shares") and (iii) the shares owned by holders who have validly exercised and not effectively withdrawn or lost their appraisal rights pursuant to Section 179 of the British Virgin Islands Business Companies Act, 2004, as amended.  The per share consideration of US$3.90 represents a premium of approximately 26.6% over the closing price and a premium of approximately 43.4% over the 90-trading day volume weighted average price on May 18, 2012, the last trading day prior to the Company's announcement on May 21, 2012 that it had received a "going private" proposal from Mr. Hong. Collectively, the Founder Shares and Rollover Shares represent approximately 33.9% of the Company's ordinary shares.

Parent intends to finance the merger through a combination of proceeds in the amount of US$48 million from an exchangeable notes subscription agreement with certain affiliates of China Everbright Investment Management Ltd. and an equity commitment of US$3.594 million by Mr. Hong. 

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