BEIJING, Aug. 10, 2012 /PRNewswire-Asia/ -- VanceInfo Technologies Inc. (NYSE: VIT) ("VanceInfo") and hiSoft Technology International Limited (NASDAQ: HSFT) ("hiSoft") announced today that they have signed a definitive merger agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined equity value of approximately US$875 million. Under the terms of the agreement, VanceInfo and hiSoft shareholders will each own approximately 50% of the combined company. hiSoft will be the surviving listed company in the merger, and its shares will continue to be listed on the NASDAQ Global Select Market. A new name for the combined company will be announced in due course. Under the agreement, each outstanding ordinary share of VanceInfo will be exchanged for the right to receive one common share of hiSoft, and each American Depositary Share of VanceInfo ("VanceInfo ADS"), each of which represents one VanceInfo ordinary share, will be exchanged for the right to receive one American Depositary Share of hiSoft ("hiSoft ADS"). Immediately prior to the merger, hiSoft will effect a 13.9482-to-1 share consolidation and change the ratio of hiSoft ADSs representing ordinary shares from one ADS for 19 shares to one ADS for one share, which effectively implies in a 1-to-1.3622 hiSoft ADS split. These changes are designed to ensure that hiSoft and VanceInfo will have the same number of outstanding shares and ADSs at the effective time of the merger. Upon completion of the transaction, Mr. Tiak Koon Loh, the current Chief Executive Officer of hiSoft, will assume the role of Chief Executive Officer of the combined company, while Mr. Chris Chen, the founder and current Chairman and Chief Executive Officer of VanceInfo, will assume the role of Non-Executive Chairman. The board of directors of the combined company will consist of four directors selected by VanceInfo and four directors selected by hiSoft. The strategic combination will create a combined company with expected 2012 revenue of over US$670 million, which will be the largest China-based offshore IT services provider based on industry market research reports. The combined company will have the scale and diversity to compete on a global basis, with a stronger customer platform created by the complementary customer bases of hiSoft and VanceInfo, an enlarged and diversified asset portfolio, an extended business pipeline and a strong balance sheet and cash flow profile. Customers of the combined company will benefit from an expanded pool of consultants and engineers around the world with a commitment to superior customer service and a highly experienced management team from both companies with extensive industry knowledge and experience. "I am excited to be leading the new company to create China's global champion in IT Services. The combined company will be a clear market leader in serving domestic and offshore customers with the largest resource base, most comprehensive breadth of IT services capability and the most balanced geographic customer profile," said Mr. Loh. "Our common vision in building a world class services organization delivering outstanding financial performance has already helped us to identify some strong synergistic opportunities for the combined company. We expect to see significant synergies across a number of areas including sales, general and administrative costs, effective utilization of facilities and sharing of future R&D and capital investments." "VanceInfo and hiSoft are pioneers in China IT Services who have built strong, loyal customer bases," said Mr. Chen. "The joint company can take advantage of the strong market growth opportunities while continuing to attract the best people. Our broader scope of capabilities leveraged across a deeper sales force will also open ample new business development opportunities. This combination will be perfectly placed to address my vision since the founding of VanceInfo to build an unrivalled leader in China IT Services serving the global market. As Chairman, I look forward to working with Mr. Loh and the management team to deliver this vision." The combined company will employ over 23,000 people across 13 locations in China and 14 additional locations worldwide. It will serve a global base of top tier customers, which include some of the largest Chinese corporations as well as many Fortune 500 companies. Its vertical areas of strength will include TMT, BFSI, Transport and Manufacturing. The companies have identified potential cost synergies, which are expected to reach 2% of combined revenues within 18 months after the closing of the transaction. The parties are developing a defined execution plan and anticipate that the transaction will be accretive within the first 12 months following the consummation of the merger.