CIBER, Inc. (NYSE: CBR), a global information technology consulting, services and managed services company, today announced that it has entered into a purchase agreement to sell its Federal Division and related assets to CRGT Inc., a leading provider of emerging technology solutions for the U. S. federal government and a portfolio company of Veritas Capital. The purchase price is $40 million in cash, subject to adjustment.
Dave Peterschmidt, President and Chief Executive Officer of CIBER said, "As a result of our extensive review of our business lines and customer segments, we have decided to sell our Federal Division. Selling this division is a logical step for us as we continue to narrow our focus, streamline our business mix and concentrate our resources on our core offerings and market segments."
Claude Pumilia, Executive Vice President and Chief Financial Officer, commented, "The divestiture of our Federal business reduces the complexity of CIBER and creates an opportunity for us to use net cash proceeds of approximately $35 million to invest to strengthen our offerings or to reduce our outstanding debt balance."
CIBER obtained the required consent from its lenders to enter into this purchase agreement and modified the financial covenants in the Credit Agreement to take into account the effects of this transaction. CIBER agreed to apply the net proceeds from this transaction in excess of $25 million to the reduction of the revolving credit commitments.
CIBER plans to report the financial results for this segment as a discontinued operation and plans to recognize an approximately $30 million non-cash charge to write-down the Federal Division net assets to their estimated fair value in its December 31, 2011 financial statements. The Company expects the transaction will close within three months, subject to certain closing conditions.
Moelis & Company served as financial advisor and Hogan Lovells as legal advisor to CIBER.
About CIBER, Inc.
CIBER, Inc. is a global information technology consulting, services and outsourcing company applying practical innovation through services and solutions that deliver tangible results for both commercial and government clients. Services include application development and management, ERP implementation, change management, project management, systems integration, infrastructure management and end-user computing, as well as strategic business and technology consulting. Founded in 1974 and headquartered in Greenwood Village, Colorado, CIBER has more than 8,500 employees and subcontractors and operates in 18 countries, serving clients in North America, Europe and Asia/Pacific. Annual revenue in 2010 was $1.1 billion. CIBER trades on the New York Stock Exchange (NYSE: CBR), and is included in the Russell 2000 Index and the S&P Small Cap 600 Index. For more information, visit www.ciber.com.
CRGT is a leading expert in emerging technology solutions for the federal government. Working as a close partner with agencies spanning defense, domestic security and civilian services, CRGT has earned a proud track record with integration and operations for large-scale, high-volume solutions that connect vital agencies to their diverse constituencies. CRGT is best known for its efforts with the Army Knowledge Online (AKO) program, an enterprise-scale, cloud-based, knowledge management solution serving over 2.2 million users globally. CRGT also works across innovative technology domains, including secure mobile computing, multimedia-rich services, business intelligence and cyber security to support clients such as the Department of Justice, Department of Homeland Security, the U.S. Army, the Veterans Administration, United States Postal Service, Montgomery County, MD and more. Spun out from CherryRoad Technologies in 2008, CRGT is a uniquely positioned, nimble organization that has offered customers flexibility and agility for over 25 years, combined with the strength that comes from being part of the Veritas Capital group. For additional information, visit www.crgt.com. For more on Mobility Solutions, visit www.crgt.com/solutions/mobility.html.