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February 21, 2007
IT and business service company LogicaCMG said Tuesday it has sold its Telecoms Products division to an investment consortium led by Atlantic Bridge Ventures for £265m.
The Telecoms Products division houses the company’s mobile messaging and payments operations.
Martin Read, chief executive of LogicaCMG, said that the proceeds of the sale would be used to fund a share buyback programme worth approximately £130m.
The remaining net proceeds would be used to reduce debt and to fund the buy out of some existing minority interests.
The telecoms unit generated a total adjusted EBITDA of £23m and adjusted operating profit of £13.9m in 2005. In 2006, operating profit improved marginally. SMS solutions represented approximately 60 per cent of the unit’s revenue in 2005.
The division employs approximately 1700 people across 22 countries. Most of these employees, including the current management team, are expected to transfer with the business.
“Over the last two years, we have significantly improved the profitability of the Telecoms Products business and developed a new product range. We have now secured an attractive sale price for the strengthened business,” said Read. “This divestment allows LogicaCMG to focus on its core strengths in IT and business services, using its industry and domain expertise and its strong business and technology insight to enable its customers to become more productive.”
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