Longtop Financial Technologies Limited (NYSE: LFT), a leading software developer and solutions provider targeting the financial services industry in China, recently shared that the Company has entered into a definitive agreement to acquire for cash 100% of Giantstone Information & Technology Ltd., a leading core banking solution provider in China. The acquisition is expected to close prior to March 31, 2010, and is expected to be earnings accretive for the fiscal year ended March 31, 2011.
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"We believe one of the keys to successful core banking implementations in China is domestic knowledge which the Giantstone management team, one of the most experienced in China's banking industry, brings to Longtop. Over the next ten years, we believe the national commercial, regional, larger city banks and smaller banks in China will accelerate their investment in upgrading or replacing their existing core banking systems. The acquisition of Giantstone fills one of the main gaps we had in our product portfolio and will allow us to capitalize on the core banking opportunity in the non-Big Four Bank customer segment, which now accounts for 35 to 40% of our software development revenues. Our core banking competency will also open up new cross-sell opportunities for our existing solutions such as BI and risk management applications. Furthermore, Giantstone's proprietary core banking solution aimed at smaller banks will also potentially open up a new customer segment," said Weizhou Lian, Chief Executive Officer of Longtop. According to the market research firm IDC, core banking systems became the "largest IT investment category" in 2008 with a total market size of US$176 million, and over 20%, of the total banking IT solution market. IDC expects demand for core banking systems to grow at a compounded annual growth rate of 17% from 2009 to 2013 to reach US$397 million in 2013. Longtop is a leading software development and solutions provider targeting the financial services industry in China. Longtop develops and delivers a comprehensive range of software applications and solutions with a focus on meeting the rapidly growing IT needs of the financial services institutions in China. Longtop is the highest ranked Chinese financial technology provider on the Global FinTech 100 survey of top technology partners to the financial services industry. Independent research firm IDC has also named Longtop the No.1 market share leader in China's Banking IT solution market and the No.2 market share leader in China's Insurance IT solution market in calendar year 2008. Headquartered in Beijing, Longtop has six solution delivery centers, three research and development centers and 95 ATM service centers located in 27 out of 31 provinces in China.
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