NEW YORK (TheStreet) -There is no escaping the outsourcing trend, especially for IT services. However, what is considered offshore for U.S.-based companies translates into growth opportunities for China.

Amidst this global shift, iSoftStone Holdings has emerged as leading IT services provider, assisting both domestic clients in greater China and global clients, primarily in the U.S., Europe and Japan.

UBS Investment Bank will be taking the lead, with plans to price 10.8 million ADS's between $11.00 and $13.00. Each ADS is equivalent to 10 ordinary shares and ISS will be selling 68% of deal. Although the market has been flooded by Chinese-based IPOs, investors continue to take notice of solid companies such as ISS.
  • iSoftStone Holdings: ISS
  • Lead Underwriter: UBS Investment Bank
  • Offering: 10.83 million ADS's
  • Current Price Range: $11.00 - 13.00
  • Deal size to the mid-range: $130.0 million
  • Market cap to the mid-range: $611.6 million
  • Sector: Custom Computer Programming Services
  • Scheduled: Today

ISS generates revenues through IT services, which is its largest segment, followed by its higher margin consulting and solutions segment and its newest line of business process outsourcing, or BPO services.

Typically, ISS works with its clients on a non-exclusive, project-by-project basis, serving four target industry verticals that include technology; communications; banking, financial services and insurance, or BFSI; and energy, transportation and public sector.

Although ISS does not lock its customers into long-term commitments, it has built strong relationships, currently serving 71 Fortune 500 companies, including 23 located in China.

Clearly ISS has been able to build a global customer base; unfortunately, it remains dependent on a small number of major clients, such as Huawei and Microsoft ( MSFT), which each continue to supply more than 10% of total revenues.

Going forward investors will expect more variety, but these relationships contributed 38.1% and were the driving force behind the 50.2% year-over-year increase in top-line results for the first nine months of 2010.

Significant growth in its headcount has allowed it to keep pace with these developing relationships and new client activity, as ISS remains committed to recruiting, training and retaining human capital.

This has been demonstrated by the establishment of three major training centers in China, including the recent iCarnegie-iSoftStone training institute, which is maintained by Carnegie Mellon University.

Additionally, ISS's founder will remain committed to future operations, by holding a 17.7% share after the IPO. There will also be several entities, including two that are selling a small portion at the IPO and Bayfront which will concurrently purchase the equivalent of roughly 1.7 million ADS in a private placement.

Not only has ISS financed its operations from these partnerships, but it has also broken with the dominant Chinese trend by taking on short-term borrowings, all of which will be repaid from the proceeds.

The overall retention of large shareholders and addition of Bayfront at the IPO price should provide support for ISS's future potential. While some new investors may be concerned that the majority of ownership falls into just a few hands, ISS has proven its ability appeal to a variety of corporations spanning growing industries and we expect a solid pricing followed by an attractive aftermarket performance.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.