CDC Software Signs Binding Term Sheet to Acquire a Business Intelligence Solutions Provider for Manufacturing

SHANGHAI & ATLANTA–(BUSINESS WIRE)–Oct. 5, 2009– CDC Software Corporation (NASDAQ: CDCS), a global provider of enterprise software applications and services, today announced it has signed a binding term sheet to acquire a provider of business intelligence solutions for manufacturing that it believes will help expand the market share of CDC Software solutions in the Tier 1 food and beverage, consumer packaged goods (CPG) and automotive markets. Terms call for an all cash transaction.

In the event this transaction is completed, the acquisition is expected to generate new cross-selling opportunities for CDC Supply Chain in the Tier 1 automotive market, as well as expand CDC Software’s manufacturing solutions’ already significant footprint in the food and beverage and consumer packaged goods markets. In addition, CDC Software believes it can incorporate its X-alert supply chain event management tool, a new product acquired from its purchase of Categoric in September 2009, with the target’s manufacturing intelligence solution. For example, manufacturing intelligence can reveal a potential problem on a production line and X-alert could trigger an automatic transaction that would help correct the situation as well as email the supervisor immediately.

For over a decade, this venture capital-financed company has provided business intelligence solutions that promote continuous improvement initiatives for the factory floor. Its patented business intelligence software helps companies manage their operational performance by focusing on the key issues in their facilities, which ultimately affect cost, quality, and supply chain demand requirements. Their software is installed at more than 200 plants that include some of the world’s leading automotive, food and beverage, forestry products and CPG companies.

This acquisition announcement marks the latest of several strategic initiatives undertaken by CDC Software. Last quarter, CDC Software completed the acquisition of WKD Solutions Ltd., a leading provider of supply chain event management solutions marketed under the brand Categoric, and signed an agreement to acquire up to 51 percent of Hejia Software, a major ERP software provider based in Beijing.

“This planned acquisition is expected to be earning accretive immediately and we believe it will help us expand our already significant penetration of CDC Software solutions in the food and beverage and CPG markets, as well as help CDC Supply Chain solutions penetrate further in the Tier 1 automotive industry,” said Bruce Cameron, president of CDC Software. “CDC Software’s acquisition strategy is a key part of the company’s plan for growth and we believe our strategy is enabled by our global scalable business and technology platform that features an infrastructure of multiple complementary applications and services, domain expertise in vertical markets, cost effective product engineering centers in India and China and a worldwide network of direct sales and channel operations. We believe our global platform is a key reason why we have successfully integrated acquisitions that have resulted in a deeper and broader product portfolio, expanded geographic reach, and increased vertical expertise. ”

The acquisition is subject to several customary closing conditions, including the execution of definitive documentation related to the acquisition, the receipt of all requisite approvals and consents, and the satisfactory completion of due diligence by CDC Software. The acquisition is expected to close in the fourth quarter of 2009.