Caixin
Jan 20, 2017 04:18 AM
M&A

China’s Oceanwide, IDG Capital to Buy U.S. Tech Publisher

(Beijing) – A conglomerate led by real estate developer China Oceanwide Holdings and China-based investment firm IDG Capital agreed to acquire controlling interests in Boston-based International Data Group Inc., the companies said Thursday.

When the deal closes, privately owned Oceanwide will hold a controlling stake in International Data’s tech research businesses, International Data Corp. and media subsidiary IDG Communications, while IDG Capital will take a minority stake. IDG Capital will also own a majority stake in International Data’s investment subsidiary, IDG Ventures, in which Oceanwide will hold a minority stake.

No detailed terms and price were disclosed for the deal.

The transactions are expected to close in the first quarter and have been cleared by the U.S. Committee on Foreign Investment, which reviews the national security implications of foreign investments in American companies.

The announcement ends years of speculation on the disposition of the assets of privately held International Data following the 2014 death of founder Patrick McGovern. International Data is the 111th largest private U.S. company with $3.8 billion in revenue and 13,200 employees worldwide as of 2015, according to Forbes. The company operates publishing, research, marketing and events businesses in more than 90 countries.

“We believe China Oceanwide and IDG Capital will provide the right financial, strategic and cultural fit to take IDG to greater heights,” said Walter Boyd, chairman of International Data, in a press release.

Media previously reported that International Data was seeking as much as $1 billion. A source close to the matter told Caixin that the companies have agreed on the price for IDG Ventures but haven’t finalized a price for International Data’s other businesses. This individual said the $1 billion figure is not reliable.

After the transaction, International Data will retain its Boston headquarters and current management team, according to IDG Capital.

China Oceanwide’s founder and chairman, Lu Zhiqiang, said the International Data assets are a natural extension of Oceanwide’s international portfolio. Last fall, the company paid about $2.7 billion to acquire Genworth Financial, a provider of long-term care insurance that was spun off by General Electric Co. in 2004. Oceanwide also owns real estate in New York, San Francisco, Los Angeles and Hawaii.

IDG Capital is one of China’s first venture capital firms, founded in 1993 by Hugo Shong, a longtime International Data executive who considers the late McGovern as a “mentor.” International Data initially invested $10 million in IDG Capital, but is no longer a limited partner. The two companies now share only the IDG brand name.

IDG Capital has invested in some of China's biggest tech companies such as Baidu, Tencent, Sohu and Xiaomi and Ctrip.com.

Contact reporter Han Wei (weihan@caixin.com)


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