CHINA - - Press ReleaseSource: chinadotcom corporation
chinadotcom Unit Completes Acquisition of Newpalm
Thursday April 3, 7:17 am ET
- Financials of Newpalm to be consolidated in Q2 2003 earnings, expected to add over US$2.5 million of high-margin, earnings-accretive revenues to the group for the quarter - Planned integration with chinadotcom's portal network developing additional services to its subscribers and providing strategic fits to its portal business - Acquisition adds over 3 million paid-up subscribers to the company's portal network
HONG KONG, April 3 /PRNewswire-FirstCall/ -- chinadotcom corporation (Nasdaq: CHINA; website: www.corp.china.com), the leading integrated enterprise solutions company in Asia, today announced the completion of its acquisition of Newpalm (China) Information Technology Co., Ltd. ("Newpalm"), a leading short message service (SMS) mobile software platform developer and application service provider in China, through its mobile applications and portal arm and 81%-owned subsidiary, hongkong.com Corporation. Cash consideration of US$14 million has been paid with remaining consideration to be paid on an earn-out basis over the next two years. It is expected that the full second quarter financial contribution of Newpalm will be included within chinadotcom's consolidated financial results for Q2 2003.
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Since the signing of the initial acquisition agreement in March this year, Newpalm has shown significant progress in terms of growth of subscriber base. In March 2003, Newpalm has added over 300,000 new paid-up subscribers to an aggregate of over 3 million, representing a 10% increase over the previous month and a 40% growth rate over the level at the end of December 2002. Leveraging on the online expertise and resources of chinadotcom, chinadotcom plans to integrate Newpalm into its portal network to develop additional services such as news channels and interactive games. In addition, the acquisition of Newpalm should further strengthen and broaden chinadotcom's existing portal community services such as e-Match and Love Skyby integrating Newpalm's popular X-City service. More integration between Newpalm and chinadotcom's portal network is expected in the near future.
"We are pleased to see a healthy trend of continued subscriber growth at Newpalm. While there is no assurance that the current growth rates can be maintained or that the identified synergies will come to the fore, we are nevertheless excited about the addition of Newpalm into the chinadotcom group," said Daniel Widdicombe, Chief Financial Officer of chinadotcom corporation. "The completion of the acquisition in early April this year should allow us to consolidate the entire Q2 2003 financial result of Newpalm. This is expected to bring more than US$2.5 million in additional high-margin, earnings-accretive revenues to the chinadotcom group for the quarter."
Newpalm has direct connections with local network operators in 22 provinces in China, with a strong presence in Shandong, Zhejiang and Jiangsu Provinces and service coverage throughout the country. Newpalm has principally developed its own intellectual property of mobile applications and products compatible with GSM and CDMA networks based on an open-architecture technology platform that supports SMS and MMS (Multi-Media Message Service) and allows rapid capacity expansion. In addition, Newpalm runs two R&D (Research and Development) centers, in Beijing and Nanjing, with over 40 professional application developers.
"We anticipate that the planned integration of Newpalm with our portal network will further strengthen our portal market position in China and will allow us to develop additional services and products to our subscribers", said Rudy Chan, Chief Executive Office of hongkong.com Corporation. "Given the recent fast growing SMS business in China, we see great potential in this market place and we believe our track record in China, coupled with Newpalm's mobile application technology and established customer base will help us gain traction in this arena in the long term."
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