The largest mergers and acquisitions in the field of software outsourcing in China

Absrtact: The largest mergers and acquisitions in the field of software outsourcing in China, the main character is two Chinese companies listed in the United States: Evans Information and Hisoft software. According to the merger agreement signed by the two sides, the shares of the two sides will be merged in 1:1, and the shareholders of two companies will each hold

Domestic software outsourcing in the field of the largest mergers and acquisitions, the protagonist is two U.S.-listed Chinese companies: Evans Information and Hisoft software.

Under the merger agreement between the two sides, the shares will be merged in 1:1, and the two shareholders will each hold about 50% of the merged new company, and the original Hisoft shares will be listed on the NASDAQ Global Select market.

Personnel, the original Hisoft software CEO Lu Jie will serve as the CEO of the new company, the original chairman Chen Shuning will assume the new company Non-executive Chairman. The merged new company's board will be composed of 8 directors, two of whom shall appoint 4 directors.

As the two important enterprises in the field of software outsourcing in China, the merger of Evans and Hisoft indicates that the Chinese outsourcing industry in transition is beginning to shuffle.

Outsourcing industry is transforming

At the Dalian Soft Rendezvous in June this year, the topic of how to transform Chinese software outsourcing Enterprises has become the focus of Congress. Jiren, Chairman and CEO of Neusoft, has been very impressive. He warned Chinese software outsourcing companies that China is increasingly not a Low-cost software engineer country, which has become a fact.

In the past more than 10 years, China's software outsourcing industry has made very rapid development, but this development is mainly dependent on cheap labor resources.

In recent years, as inflation has intensified, the human costs of domestic it talent are rising, and the outsourcing model of relying on cheap labor has met the ceiling. At the same time, the global economic downturn, so that the outsourcing business can become a very low profit industry at any time.

In the face of such an industry development environment, software outsourcing Enterprises can choose the development path is not much. They either choose to scale development, enhance the bargaining power of customers across the line, or develop professional development, and expand the outsourcing business of high value-added.

The merger of Evans and Hai-Hui seems to imply that they have chosen the path of large-scale development. In fact, the two companies are also very complementary business, after the merger of the staff can reach 23,000, a leap into China's largest software outsourcing company.

In the field of software outsourcing, the size of the company is one of the important requirements for large orders, because some services and software development projects require thousands of people to coordinate their work. If a company is only 35,000 people, it will be difficult to deliver some large projects. In this regard, India's outsourcing companies have an advantage. India's software outsourcing companies, such as Tata, Infosys and so on, have a total workforce of more than hundreds of thousands of.

Industry will shuffle

Although there are a lot of mergers and acquisitions in the Domestic software outsourcing field, such large-scale mergers like Evans and Hisoft are rarely seen.

In 2009, Neusoft had planned to acquire Dalian Huaxin in the context of the economic crisis, expanding the scope of the company's international software outsourcing and service business, but did not do so in the end. If the takeover succeeds, Neusoft will become China's first employee over 20,000 software outsourcing companies 3 years ago.

Now, the combination of Evans and Hisoft will become the largest software outsourcing enterprises in China, which strengthens their bargaining power, and will certainly be able to squeeze the market share of other software outsourcing enterprises such as neusoft and soft power.

In the face of the complex economic environment, rising human costs, perhaps the merger is only the beginning of the merger of Chinese outsourcing enterprises, China's outsourcing industry reshuffle may start.