TechTeam Global Completes Sale of Government Subsidiary
The Southfield IT and business process outsourcing provider TechTeam Global Inc. (Nasdaq: TEAM) said Tuesday that the company has completed the sale of its government IT services subsidiary, TechTeam Government Solutions Inc., to Pasadena, Calif.-based Jacobs Engineering Group Inc. (NYSE: JEC) for $43 million in cash, subject to certain escrows and adjustments as set forth in the definitive stock purchase agreement dated June 3, and as amended on Sept. 14.
TechTeam has used a portion of the net cash proceeds from the transaction to pay off its debt under its existing credit facility. The company intends to use the remaining portion of the net cash proceeds from the transaction for working capital and general corporate purposes, and to selectively invest in the growth of its commercial business.
TechTeam will focus on its commercial business, which contributed approximately $64.5 million of the company’s $94.8 million in total revenue for the six months ended June 30, 2010, and approximately $134.8 million of the company’s $211.2 million in total revenue for the fiscal year ended Dec. 31, 2009.
“We are pleased to have completed this transaction which is the result of the board’s evaluation over the past 18 months of various strategic alternatives to reposition the Company for stability and growth,” said Seth W. Hamot, chairman of the board of directors of TechTeam Global. “This transaction will provide the company with significant financial flexibility which will enhance our more focused business efforts. The sale of our government solutions business is an important step forward to unlocking the intrinsic value of TechTeam’s underlying assets, and we remain committed to evaluating various alternatives for our commercial business to enhance shareholder value.”
More at www.techteam.com.
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