Logica offloads telecoms biz
Ditching products, beefing services
LogicaCMG has sold its telecoms products division to a private equity consortium for £265m.
The firm said in a statement today that it would use proceeds of the sale to pay £130m into a buyback scheme for shareholders, reduce debt, and buy-out minority interests.
Atlantic Bridge Ventures, which led the buying consortium, has a spread of investments that include Warner Music Group, Russian oil business TNK-BP, and the Siberian Urals Aluminium Company.
The firm said it also had a focus on telecoms infrastructure, semi-conductor and software markets.
LogicaCMG's telecoms products division made about 60 per cent of its business from selling SMS services to mobile operators. It also provided multimedia messaging and voicemail services.
A statement about the deal said revenue at the division last year was flat after currency adjustments, but operating profit had improved "marginally" over the £13.9m it scored in 2005.
It employed 1,700 people in 22 countries, most of whom were expected to move with the sale, which is dependent on the outcome of consultation with employees and the approval of regulators. LogicaCMG would loan the division £15m to be repaid in two years.
LogicaCMG said it wanted to concentrate on developing its IT services business. ®