CLPS Incorporation Successfully Acquires Shell Infotech, Accelerating Global Expansion Strategy

Rhea-AI Summary

CLPS has successfully acquired Shell Infotech through its subsidiary Ridik Pte. , aiming to bolster its global expansion strategy, particularly in Southeast Asia. Established in 2003 and based in Singapore, Shell Infotech is a renowned IT consulting and managed services provider, with a strong presence in banking and insurance sectors across Singapore and Malaysia.

The acquisition will integrate Shell Infotech's workforce into CLPS's operations, with employees relocating to Ridik's Singapore office. This move is projected to increase CLPS's revenue in Southeast Asia by 25% to 30% and bring 27 new clients into its fold. CLPS plans to maintain the Shell Infotech brand to leverage the combined strengths of both firms, enhancing its market competitiveness and expanding its service offerings.

Key executives from CLPS expressed optimism about the acquisition, highlighting its role in advancing the company's growth plans across the Asia-Pacific region, including markets in Malaysia, the Philippines, Japan, India, Vietnam, and Australia.

Positive

• Acquisition of Shell Infotech expected to increase CLPS's revenue in Southeast Asia by 25% to 30%.
• Expansion adds 27 new clients to CLPS's portfolio.
• Strengthens CLPS's core IT competencies and service offerings.
• Seamless integration of Shell Infotech's workforce into CLPS's operations.
• Enhanced brand recognition and market competitiveness in Southeast Asia.
• Supports CLPS's growth plans in the Asia-Pacific region, including Malaysia, the Philippines, Japan, India, Vietnam, and Australia.
• Shell Infotech has a strong reputation and deep industry expertise in IT consulting and managed services.

Negative

• Potential integration challenges with Shell Infotech's workforce relocation to Singapore.
• Dependence on the successful integration to achieve the projected revenue increase.
• Risk of overextending resources during the global expansion.

Insights

Financial Analyst

The acquisition of Shell Infotech by CLPS Incorporation presents significant financial implications for the company. First and foremost, the estimated 25%-30% revenue increase expected from this merger in Southeast Asia could considerably boost CLPS's top line. For context, such increases reflect substantial growth potential, particularly in regions where IT and managed services are burgeoning industries.

For investors, this translates to a potential rise in stock value, given that revenue growth often correlates with positive stock performance. Moreover, the acquisition brings 27 new clients, which not only diversifies CLPS's revenue streams but also spreads the financial risk across different client bases, reducing dependency on a few large clients.

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Tech Expert

From a technological standpoint, the acquisition of Shell Infotech significantly strengthens CLPS's capabilities and service offerings. Shell Infotech's expertise in software development, SAP solutions and enterprise applications aligns perfectly with CLPS's strategic goals. These competencies are important as businesses across Southeast Asia increasingly demand advanced IT solutions, especially in banking and insurance sectors where Shell Infotech has established a strong presence.

Additionally, the integration of Shell Infotech's workforce into CLPS can accelerate the latter's product development cycles and enhance its service delivery. This synergy could result in innovative IT solutions, positioning CLPS favorably in a competitive market.

Market Research Analyst

The acquisition's broader market implications are equally notable. Southeast Asia is an emerging market with a rapidly growing IT sector. By acquiring Shell Infotech, CLPS not only expands its geographic footprint but also gains a foothold in key markets like Singapore, Malaysia and potentially expanding into other countries like Japan and Vietnam. This strategic move aligns with global expansion trends where companies seek to tap into high-growth regions to fuel their growth.

For retail investors, understanding the dynamics of these markets is crucial. The IT services market in Southeast Asia is marked by high demand for digital transformation and IT outsourcing services, presenting ample opportunities for growth. However, investors should also be aware of the competitive landscape and potential regulatory challenges in these markets.

HONG KONG, June 13, 2024 /PRNewswire/ -- CLPS Incorporation (the "Company" or "CLPS") (Nasdaq: CLPS) today announced that, through its wholly-owned subsidiary, Ridik Pte. Ltd. ("Ridik"), it has acquired 100% of the equity of Shell Infotech Pte. Ltd. and its wholly-owned subsidiary Shell Infotech Consulting Sdn. Bhd. (collectively, "Shell Infotech"). This acquisition expands CLPS's client base and market share in Southeast Asia while strengthening its core IT competencies and service offerings, solidifying its commitment to global expansion.

Established in 2003 and headquartered in Singapore, Shell Infotech is a leading IT consulting and managed services provider. Over the years, Shell Infotech has built a strong reputation for its deep industry expertise and professional service team, delivering industry-leading services to clients in Singapore and Malaysia. It offers a wide range of IT services, including software development, SAP solutions, enterprise applications, and managed services, with a focus on the banking and insurance sectors.

Following the acquisition, Shell Infotech's workforce will be seamlessly integrated into CLPS's organizational structure, with its employees relocating to Ridik's office in Singapore. CLPS will maintain the Shell Infotech brand to serve its clients, leveraging the combined technical prowess, management expertise, and client resources of both companies. This strategic approach aims to solidify CLPS's brand recognition, enhance market competitiveness in Southeast Asia, and ultimately enable the delivery of innovative and efficient IT services and solutions to its clients. The acquisition of Shell Infotech is expected to bring 27 new clients to the Company and drive a projected 25% to 30% revenue increase in Southeast Asia.

Mr. Srustijeet Mishra, Chief Executive Officer of CLPS SEA & USA, said, "The successful acquisition of Shell Infotech is a significant achievement for CLPS. It further expands our reach across Southeast Asia and brings valuable assets like reputable clients, a wealth of technical resources, and a team with deep industry knowledge. This strongly supports our growth plans for the Asia-Pacific region, as we expand our operations from Singapore to Malaysia, the Philippines, Japan, India, Vietnam, and Australia."

Mr. Henry Li, Chief Operating Officer of CLPS, commented, "We are thrilled to welcome Shell Infotech to the CLPS family. This marks a major leap forward in growing our international presence. We are actively pursuing international M&As that cohesively complement our business model, and Shell Infotech perfectly exemplifies this approach. This move strengthens our position in the IT services landscape and unlocks exciting opportunities for business growth."

About CLPS Incorporation

Headquartered in Hong Kong, CLPS Incorporation is a global leading information technology ("IT") consulting and solutions service provider focused on delivering services primarily to global institutions on the banking, wealth management, e-commerce, and automotive sectors. The Company serves as an IT service provider to a growing network of clients in the global financial service industry, including large financial institutions in the U.S., Europe, Australia, Asia, and their PRC-based IT centers. The Company maintains 20 delivery and/or research & development centers to serve different customers in various geographic locations. Mainland China centers are located in Shanghai, Beijing, Dalian, Tianjin, Xi'an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan. The remaining 10 global centers are located in Hong Kong SAR, USA, Japan, Singapore, Australia, Malaysia, India, Philippines, Vietnam, and Canada. For further information regarding the Company, please visit: https://ir.clpsglobal.com/, or follow CLPS on Facebook, Instagram, LinkedIn, X (formerly Twitter), and YouTube.

Forward-Looking Statements

Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance. Known and unknown risks, uncertainties and other factors, which may be beyond the Company's control, may cause the actual results and performance of the Company to be materially different from such forward-looking statements. All such statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties related to the Company's expectations of the Company's future growth, performance and results of operations, the Company's ability to capitalize on various commercial, M&A, technology and other related opportunities and initiatives, as well as the risks and uncertainties described in the Company's most recently filed SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.

Contact:

CLPS Incorporation
Rhon Galicha
Investor Relations Office
Phone: +86-182-2192-5378
Email: ir@clpsglobal.com

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SOURCE CLPS

FAQ

What is the impact of CLPS's acquisition of Shell Infotech on its revenue?

The acquisition is projected to increase CLPS's revenue in Southeast Asia by 25% to 30%.

How many new clients will CLPS gain from the Shell Infotech acquisition?

CLPS will gain 27 new clients through the acquisition of Shell Infotech.

What sectors does Shell Infotech primarily serve?

Shell Infotech primarily serves the banking and insurance sectors in Singapore and Malaysia.

How will the acquisition of Shell Infotech enhance CLPS's market position?

The acquisition will strengthen CLPS's core IT competencies and service offerings, enhance brand recognition, and increase market competitiveness in Southeast Asia.

What regions are included in CLPS's growth plans following the acquisition?

CLPS's growth plans include regions in the Asia-Pacific such as Malaysia, the Philippines, Japan, India, Vietnam, and Australia.