51job Jumps 4% on $5.7 Billion Privatization Deal

A consortium including DCP Capital agreed to purchase the human resources provider for $79.05 per share.
Jun. 22, 2021 03:47
51job Jumps 4% on $5.7 Billion Privatization Deal

Shares in 51job, Inc. (Nasdaq: JOBS) rose 4% higher on Monday after it announced it entered to go private at about $5.7 billion equity value.

According to a statement posted by 51job today, a consortium including the company's chief executive officer Rick Yan, DCP Capital Partners II, L.P., and Ocean Link Partners Ltd. have struck a deal to purchase the human resources provider for $79.05 per American depositary share. The deal represents 6% upside from Friday's close.

Since September, DCP Capital has been looking to buy out 51job. Last month, the Chinese private equity firm updated the proposal by collaborating with Yan and Ocean Link before finalizing the deal today. The agreement represents a 29% premium from the last trading price before the updated proposal in May.

Last year, Ocean Link helped take China's largest platform for classifieds 58.com Inc. private in a deal valued at roughly $8.7 billion.

According to data compiled by Bloomberg, the 51job buyout is slated to be one of the biggest ones conducted by a Chinese U.S-listed firm this year.

Operating for more than 20 years, 51job provides human resources services in China including outsourcing, training, professional assessment, campus recruitment, executive search, and compensation analysis, according to the company. With a call center in Wuhan, it has sales and service locations in more than 30 cities in China.

51job has been publicly traded in the U.S. since September 2004, when it raised $73.5 million through the sale of 5.25 million shares priced at $14 each. Currently, 51job trades at more than fivefold its IPO price.

In the three months through December, 51job posted revenues that rose by 2% year-over-year to $178.3 million. Meanwhile, its profit in the quarter slipped to 342 million yuan ($52.4 million) compared with 249.5 million yuan in the same period of the preceding year.

With subject to shareholders' approval, the buyout deal is expected to close in the second half.