Cloopen agrees $163M going-private deal led by CEO consortium
What's the deal? Cloopen Group, a Chinese cloud-based communications company listed in the US, has entered into a definitive merger agreement to go private. The deal values the company at approximately $163M and is led by a buyer consortium that includes the company's chief executive officer.
The going-private transaction will take Cloopen off the New York Stock Exchange, converting it from a publicly traded entity back into a privately held one.
Why now? Chinese tech companies listed on US exchanges have faced mounting pressure in recent years — from regulatory scrutiny on both sides of the Pacific to persistently depressed valuations. For a mid-cap name like Cloopen, the costs and complexities of maintaining a US listing may have outweighed the benefits, making a take-private deal an attractive exit for both management and investors.
CEO-led buyouts of US-listed Chinese firms have become increasingly common as founders seek to reclaim control and potentially relist closer to home at better valuations.
What could go wrong? Going-private deals involving management buyouts can raise governance concerns. When a CEO is on both sides of the transaction — as both buyer and fiduciary for public shareholders — minority investors may question whether the price truly reflects fair value. The $163M offer will need to clear shareholder approval and customary closing conditions.
The signal: Cloopen's $163M take-private deal underscores how far valuations for US-listed Chinese tech firms have fallen — the company raised $318M in its 2021 IPO, meaning the buyout consortium is acquiring it at a steep discount to its debut. With the CEO leading the buyer group, the transaction follows a familiar playbook: management teams capitalising on depressed public market pricing to regain control, with an eye on a potential future relisting in Hong Kong or mainland China at more favourable multiples.
Read more: prnewswire.com
