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GEONG International buys Hong Kong’s Adbeyond for £9.6 million

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Chinese Internet software business GEONG International (LON:GNG) is to acquire Hong Kong-based Adbeyond for HK$120 million (£9.6 million).

GEONG is to pay for the acquisition in cash and stock in two tranches.

The firm also said that, in connection with the acquisition, it had entered into a non-binding term sheet with one of its major Chinese customers to raise a further US$8 million via an issue of a two-tear 7.5 per cent convertible secured load stock.

Meanwhile, GEONG said it is also exploring the possibility of listing its shares on the Hong Kong Stock Exchange, although the firm said no final decision had been made on the matter.

GEONG believes that Adbeyond meets its strategic acquisition criteria in terms of profitability and cash generation, as well as in terms of geography, its products and services, customers, partners and management culture.

GEONG’s chief executive, Weidong Wang, said he was excited about the acquisition. “Adbeyond is a complementary offering to our current business, particularly our Social Networking 2.0 SaaS, and we believe this will broaden the bandwidth of our offering in mainland China. We look forward to updating shareholders on the integration of the business and to realising the financial and strategic benefits that we anticipate."

GEONG develops and sells Internet software solutions and related services for large enterprises in China, across a range of sector. In particular, it services the financial services, telecommunication, automotive, manufacturing and consumer sectors.

The firm generates income from consultancy services, software licences, customisation of support and maintenance, and by revenue sharing through SaaS (‘Software as a Service’) model. In strategic partnerships with IBM and Oracle, GEONG has also penetrated the South East Asia market.

At 10:42am today GEONG’s shares were unchanged at 41 pence each.

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