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Alcatel-Lucent sells off US subsidiary

Alcatel-Lucent has sold off US subsidiary LGS Innovations

Alcatel-Lucent has sold off US subsidiary LGS Innovations

Infrastructure vendor Alcatel-Lucent has sold off US subsidiary LGS Innovations. The business will be sold to an investor group led by private equity investment firm Madison Dearborn Partners that also includes CoVant, which specialises in the acquisition of firms that provide technology solutions to the US government.

LGS Innovations provides secure networking, satellite communications, VoIP, optical routers and solutions for US national security, defence, and advanced research communities. It has been a “trusted partner” of the US federal government for more than 60 years, according to Alcatel-Lucent.

The divestment forms part of Alcatel-Lucent’s strategy to reposition itself as a specialist in IP networking and ultra-broadband access. The vendor’s “Shift Plan” also aims to reduce its fixed cost structure by €1bn and make asset sales in order to generate at least €1bn by the end of 2015.

The subsidiary will be sold for a total amount of up to $ 200m, of which 50 per cent will be paid at closing, and up to 50 per cent to be determined based on LGS Innovations’ results for the 2014 fiscal year.

The transaction is subject to conditions, including US Government approval, and is expected to close in the first quarter of 2014.

“LGS Innovations is a highly attractive business and we’re pleased to have the opportunity to evolve the company,” commented Doug Grissom, a managing director at Madison Dearborn and head of the firm’s Business and Government Services team.

Joseph Kampf, CEO of CoVant, added that the firm plans to capitalise on LGS Innovations’ “competitive positioning and work to expand its presence within the US government and drive its revenue by broadening its customer base, products, and solutions”.

Telecoms.com

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