XIAMEN, China, April 28 /PRNewswire-Asia/ -- Longtop Financial Technologies Limited (“Longtop”) (NYSE: LFT), a leading software developer and solutions provider targeting the financial services industry in China, today announced that the Company has entered into a definitive agreement to acquire the business and assets of Sysnet Info-tech Corporation, which was ranked as the 10th largest IT service provider in China’s insurance industry by independent market research firm IDC in 2007. Most of the acquisition consideration will be settled in cash. The acquisition is expected to close prior to June 30, 2009, and is expected to be earnings accretive in the fiscal year ended March 31, 2010.
Founded in 1994 by Xiwu Shen, Sysnet provides comprehensive information technology (IT) customized solutions and services for leading property and life insurance companies. As a market leader for insurance core business solutions, Sysnet was ranked as the No.5 life insurance core business solution provider in China by IDC in 2007. The company also offers enterprise annuity management, marketing and customer relations management, business intelligence as well as management information solutions. Sysnet has a strong and diverse customer base that includes China Life, the largest life insurance company in China, and People’s Insurance Company of China (PICC), the largest property insurance company in China, both of which are currently not Longtop’s customers.
“I am really pleased that Xiwu Shen and his team will be joining Longtop. Sysnet will provide us with access to China Life and PICC, enhance our insurance product portfolio, significantly enlarge the scale of our insurance operations as well as provide integral cross-selling opportunities, and therefore rightly suits our growth strategy,” commented Weizhou Lian, Chief Executive Officer of Longtop. “Longtop is now even better positioned to capitalize on the market opportunity in the insurance industry where we see information technology is heavily underinvested and IT services spending will continue to grow healthy year-on-year.”
The rapid growth of China’s insurance industry continues to drive the demand for IT systems and services. Total assets of the insurance industry amounted to US$ 488 billion in 2008, a year-on-year increase of 15.2%. Premium income of the insurance industry totaled US$ 144 billion in 2008, a
year-on-year increase of 39%. According to IDC, the insurance IT solutions market totaled US$ 116 million in 2007. IDC has also projected the overall insurance software and IT services market to grow at a compounded annual growth rate of over 21% from 2008 to 2012.
Conference Call
Longtop will host a conference call to discuss this announcement, at 5:00pm Pacific Time/8:00pm Eastern Time today (Beijing/Hong Kong time: April 28, 2008 at 8:00am). The management team will be on the call to answer analyst questions. To participate in the conference call, please use the dial in numbers below:
U.S Toll Free: 1-866-549-1292
China Toll Free: 400-681-6949
Hong Kong and International: +852-3005-2050
Passcode: 327526#
A replay of the call will be available for 30 days following the call by dialing the numbers below:
Hong Kong and international: +852-3005-2020
US Toll Free: 1-866-753-0743
Passcode: 136397#
A live audio webcast of the conference call, as well as online replay of the call, will be available on the investor relations section of Longtop’s website at http://www.longtop.com/en .
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by such terms as "believes," "expects," "anticipates," "intends," "estimates," the negative of these terms, or other comparable terminology. Factors that could cause actual results to differ include the effectiveness, profitability, and marketability of the company’s solutions; the Company’s limited operating history; its reliance on a limited number of customers that continue to account for a high percentage of the Company’s revenues; risk of payment failure by any of its large customers, which could significantly harm the Company’s cash flows and profitability; the ability of the Company to operate effectively as a public company; future shortage or availability of the supply of employees; general economic and business conditions; the volatility of the company’s operating results and financial condition; the company’s ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the company’s filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Any projections in this release are based on limited information currently available to us, which is subject to change.
About Longtop Financial Technologies Limited
Founded in 1996, Longtop is a leading software development and solutions provider targeting the financial services industry in China. Longtop develops and delivers a comprehensive range of software applications and solutions with a focus on meeting the rapidly growing IT needs of the financial services institutions in China. Longtop has 6 solution delivery centers, 3 research centers and 75 service centers located in 27 provinces throughout China. For more information, please visit: http://www.longtop.com .
For more information, please contact:
Longtop Financial Technologies Limited
Charles Zhang, CFA
Email: ir@longtop.com
Tel: +86-10-8421-7758
IR Inside BV
Caroline Straathof
Email: caroline.straathof@irinside.com
Tel: +31-6-54624301
