EDS today completed its sale of UGS PLM Solutions to a group of three private equity firms for $2.05 billion, before working capital adjustments.
The transaction builds on EDS`s strategic growth plan, announced last June, to focus on the company`s core information technology and business process outsourcing operations. The transaction further strengthens the company`s balance sheet as EDS remains on track to achieve zero net debt and more than $5 billion in liquidity by year-end 2004.
"We continue to execute on the plan outlined to investors last year," said EDS Chairman and CEO Mike Jordan, who was named to lead the company in March 2003. "The successful completion of this transaction aligns with our ongoing drive to strengthen our leadership position as one of only two global technology services providers. The move significantly enhances our financial flexibility and long-term competitive position and will help us continue to focus on growing EDS."
Jordan said the transaction will generate a sizable one-time gain in EDS`s second quarter 2004 results to be announced in July. UGS PLM Solutions is a leading provider of product data management, collaboration and design software applications and services.
The agreement to sell UGS PLM Solutions to a group of Bain Capital, Silver Lake Partners and Warburg Pincus was announced 14 March. In October 2003, EDS had announced plans to divest the unit through an IPO or private sale, following a comprehensive assessment of its business portfolio against the strategic plan created by EDS`s new leadership team.
"While clearly a healthy and profitable business, UGS PLM Solutions was not a strategic component of our growth strategy," said Jordan. "The completion of this sale enables EDS to continue to focus resources fully on our core strengths and building a compelling market advantage for ourselves and our clients."
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