LogicaCMG Sells Telecoms Division
LogicaCMG has sold its Telecoms Products division to an investment consortium led by Atlantic Bridge Ventures for UK£265 (US$517) million. LogicaCMG says that it expects to return approximately UK£130 (US$254) million of net proceeds to shareholders via a share buyback programme in 2007.
Commenting on the transaction, Martin Read, Chief executive of LogicaCMG, said "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. 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."
Telecoms Products is a provider of converged mobile messaging (SMS, multimedia messaging and voicemail services) and payments solutions to service providers and telecoms operators worldwide. In 2005, SMS solutions represented approximately 60% of revenue. On a constant currency basis, the revenue of Telecoms Products in 2006 was broadly stable compared to last year. Currency fluctuations will reduce reported revenue for 2006.
Telecoms Products generated total adjusted EBITDA of UK£23 (US$45) million and adjusted operating profit of UK£13.9 (US$27) million in 2005. In 2006, operating profit improved marginally due to continued cost management and a favourable revenue mix with a higher proportion of licence revenue.
Telecoms Products employs approximately 1700 people across 22 countries. Most of these employees, including the current management team, are expected to transfer with the Business."
Posted to the site on 21st February 2007
