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

Authors :           Hugh Grove, Yuhua Hao, Tom J. Cook, Tomas C. Klett

Source :             North American Case Research Association (NACRA)

Case ID :            NA0011

Discipline :        Finance

Case Length :    24 pages

Solution sample availability : YES

Plagiarism : NO (100% Original work)

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.