CDC To Spin Off Unit in IPO; Shares Rise

CDC, a Hong Kong tech firm, announced today that it will spin off its enterprise software division in an IPO. The company's stock rose on the news.
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CDC

(CHINA)

, a Hong Kong software and online-services provider, said it plans to spin off its CDC Software unit in an initial public offering that it hopes will raise $80 million.

In a press release otherwise short on details, CDC said that one of the reasons for the IPO spin-off is to "provide a more targeted investment vehicle" for those wishing to invest only in the enterprise software portion of the company's business. It will also help CDC Software raise capital for product development and potential acquisitions, the company said.

In afternoon trading Monday, CDC shares were up 8.3%, or 10 cents, to $1.30, on triple the daily average volume.

In mid-April, the company posted full-year 2008 earnings before interest, tax, depreciation and amortization of $28.7 million on revenue $409 million. Of that top line, CDC Software contributed $241 million.

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