TechTeam Global, Inc. (Nasdaq: TEAM), a worldwide provider of information technology outsourcing and business process outsourcing services, today announced that the Company has signed a definitive agreement to sell its government solutions subsidiary, TechTeam Government Solutions, Inc., to Jacobs Engineering Group Inc. (NYSE: JEC), one of the world’s largest and most diverse providers of technical, professional, and construction services.
“We are pleased with this agreement, which comes at the end of a thorough review and sale process,” said Seth W. Hamot, chairman of the board of directors of TechTeam Global. “The decision to sell TechTeam Government Solutions, Inc. resulted from the board’s evaluation over the past year of various strategic alternatives to reposition the Company for stability and growth. After this review, the board determined that focusing TechTeam Global’s efforts on the attractive commercial market would be the right course of action for TechTeam Global and our shareholders. The sale of our government solutions business is an important step forward to unlocking the intrinsic value of TechTeam’s underlying assets. We remain committed to enhancing shareholder value.”
Mr. Hamot continued, “This transaction will provide the Company with significant financial flexibility which will enhance our more focused business efforts. We intend to use the proceeds from the sale initially to eliminate our bank borrowings and increase our cash position.”
“The sale of our government solutions business represents a significant step in realizing our strategic plan for the Company,” said Gary J. Cotshott, president and chief executive officer of TechTeam Global. “Our focus will now be squarely on the commercial market, delivering leading IT outsourcing and business process outsourcing services to our global customer base. TechTeam’s leadership and excellence have been recognized by customers and industry analysts alike – and we intend to build on this strong position including further enhancing our capabilities and geographic coverage.”
Cotshott continued, “Our commercial business has been positioned for growth and profitability on a post-divestiture basis through recently completed restructuring actions and through the investments we have been making in service capabilities, geographic coverage and demand generation. We are excited about the prospects for this business – with great market potential, an outstanding base of existing customers, a solid new business pipeline and the strength of a balance sheet with a significant cash position.”
Under the terms of the definitive agreement, Jacobs Engineering will acquire 100 percent of the stock in TechTeam Government Solutions, Inc. for total consideration of $59.0 million in cash, subject to certain escrows and adjustments set forth in the definitive acquisition agreement. The transaction has been unanimously approved by TechTeam Global’s board of directors and is expected to close in the third quarter of 2010 subject to the satisfaction of various closing conditions. The transaction is also subject to approval by the stockholders of TechTeam Global, and a special meeting of TechTeam Global’s stockholders is anticipated to be held during the third quarter of 2010. Further details will be provided in filings with the U.S. Securities and Exchange Commission (SEC).
Houlihan Lokey served as TechTeam Global’s financial advisor and Blank Rome LLP and Wiley Rein LLP served as TechTeam Global’s legal advisors in connection with the sale of TechTeam Government Solutions.
Source:http://www.prnewswire.com/news-releases/techteam-global-signs-definitive-agreement-to-sell-government-solutions-subsidiary-for-59-million-95600394.html
