China Distance Education (DL) Enters Agreement to Acquire Xiamen NetinNet Software
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China Distance Education Holdings Limited (NYSE: DL) announced that it signed a definitive agreement on March 23, 2016 to acquire an 80% equity interest in Xiamen NetinNet Software Co., Ltd. ("Xiamen NetinNet") for a total consideration of RMB212 million (US$32.6 million). Xiamen NetinNet is a leading learning simulation software provider specializing in practical accounting-related learning solutions for China's college market. The acquisition is an all-cash transaction, and is expected to close in CDEL's third quarter of fiscal 2016, subject to the satisfaction of customary closing conditions. While Xiamen NetinNet is profitable, CDEL expects the transaction to be dilutive to its fiscal 2016 financial results, due to the seasonality of Xiamen NetinNet's business and amortization of intangibles attributable to the acquisition, yet slightly accretive to the Company's fiscal 2017 financial results, based on CDEL's preliminary assessment.
"We are delighted to announce the acquisition of Xiamen NetinNet," said Mr. Zhengdong Zhu, Chairman and CEO of CDEL. "This acquisition is highly complementary to our business, as it will immediately bolster our growing College Cooperation Program by enabling CDEL to better help college students master critical accounting skills through practical learning, and to prepare students for their future accounting careers. In addition to enhancing our College Cooperation Program's learning solution set, the acquisition of Xiamen NetinNet provides both of us with unique cross-selling opportunities to further develop and strengthen our business relationships with college partners. While our strategy focuses on organic growth and internally developed programs, we diligently evaluate acquisition opportunities, and will use our resources for that purpose when a company meets our financial and strategic criteria. Xiamen NetinNet represents a perfect fit for our development of the college market."
Mr. Sida Zhang, Chairman of Xiamen NetinNet commented, "We are excited to join the CDEL team, and believe our focus on China's college market, together with our expertise in simulation technology and practical accounting-related learning, will be a valuable addition to CDEL."
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