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

Case Solution

Hugh Grove, Yuhua Hao, Tom J. Cook, Tomas C. Klett
North American Case Research Association (NACRA) ()

In March 2008, the CEO had just received a surprising and unsolicited offer from a Japanese company to buy his company AmData Software China, which owns the exclusive franchise in mainland China to distribute the software of this American provider. The Japanese company has a similar exclusive franchise in Japan. Following preliminary negotiations, including a request by the Japanese company to disclose the amount of the sale in US dollars, the initial offer was increased from $ 2.5 million to $ 5.5 million. However, this amount had not yet been agreed upon by both parties and the valuation of a company would be decisive for the key decision of the case: Should the CEO sell the company now or develop it further at a later time? Such a follow-up sale could be an IPO on one of the Chinese stock exchanges.

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