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Lightning Strikes Twice

Anderson & Strudwick has done it again: The regional, Richmond-based investment firm has managed the Initial Public Offering of a Chinese company, Beijing-based Sino-Global America , on the NASDAQ. This is the second time the company has taken a Chinese company public.

Acting as lead placement agent for the offering of 1.2 million shares at $7.75, Anderson & Strudwick helped Sino-Global America, China's leading non state-owned shipping company, go public on May 21. The stock tripled in value within three days, topping out at $27 before many early investors began taking their profits.

In 2006 Anderson & Strudwick managed the IPO for eFuture , a firm also headquartered in Beijing. (See " Zhu's Big News .")

Sino-Global expects to receive $9.5 million for maximum net proceeds of $8.2 million--the majority of which it intends to use to expand its business in 15 to 35 Chinese ports. The shipping company is investing heavily in expansion of its operations to capitalize on the country's voracious demand for iron ore. It competes with the partially government-owned companies Penavico and Sinoagent which account for 85.0 percent of the market share for Chinese shipping agencies.



"After our success with eFuture, lining up investors for this initial public offering was a bit easier," said Mac Downs, senior vice president, who spent more than a year putting the deal together. "Sino-Global has a great story and strong financials to back it up."



Downs, who has made several trips to China to negotiate both the Sino-Global and eFuture IPOs, is working on other investment banking deals involving Chinese firms.



"People ask me how a small firm in Richmond is able to dig up these gems," said Downs. "I explain that the size of the firms and the size of the offerings are too small for the big boys in New York, and are too complex and take too much time for many of other investment bankers."



Downs added, "These transactions have a much longer lead time than most domestic deals, and require an understanding of the people and culture as well as the firm and the market in which it operates.



"I enjoy traveling to China and meeting with the businessmen who are looking for our help," he said. "But even more, I enjoy absorbing their culture and learning their customs. That helps me when it comes time to put these deals together."

The eFuture IPO helped raise the profile of Anderson & Strudwick among small to mid-sized Chinese. "After our previous success, we were approached by several companies, including Sino-Global about our willingness to work with them, said Downs. After doing our homework, we felt that Sino-Global should be able to raise the capital it wanted, so we got to work." Read more .