Exiting AmData Software China Ltd.: Sell Now or Later?

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Publication Date:
April 15, 2010

Industry:
Technology

Source:
North American Case Research Association (NACRA)

In March 2008 the CEO had just received a surprising and unsolicited offer from a Japanese company to purchase his AmData Software China company which owns the exclusive mainland China franchise to distribute this U.S. vendor’s software. The Japanese company owns a similar exclusive franchise in Japan. After preliminary negotiations, including a demand by the Japanese company to state the business sale amount in U.S. dollars, the initial $2.5 million offer was raised to $5.5 million. However, this amount was not yet agreed to by both parties and a business valuation analysis would be critical to the key decision of the case: should the CEO sell the company now or continue to develop it for sale at a future date? Such a subsequent sale might be an IPO on one of the Chinese stock exchanges.

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Exiting AmData Software China Ltd.: Sell Now or Later?

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