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© ljupco-smokovski-dreamstime.com Business | December 24, 2013

Alcatel-Lucent to sell LGS Innovations

Alcatel-Lucent agrees to sell LGS Innovations LLC, its US Federal Government-serving subsidiary, to Madison Dearborn Partners and CoVant.
Alcatel-Lucent has signed a definitive agreement for the sale of its subsidiary, LGS Innovations LLC, to a US-based company owned by a Madison Dearborn Partners-led investor group that includes CoVant.

The divestment forms part of the commitments outlined by Alcatel-Lucent in The Shift Plan. Announced in June the plan set out the strategy to reposition the company as a specialist in IP Networking and Ultra-Broadband Access, while reducing its fixed cost structure by EUR 1 billion and making selective asset sales to generate at least EUR 1 billion by the end of 2015.

The cash transaction agreed between Alcatel-Lucent and the Madison Dearborn/CoVant group will comprise a total amount of up to USD 200 million, of which 50 per cent will be paid at closing, and up to 50 per cent in a subsequent variable component to be determined on the divested company’s results of operations for the 2014 fiscal year. Closing of the transaction is subject to certain conditions, including US Government approvals, and is targeted to occur in the first quarter of 2014.

Michel Combes, CEO of Alcatel-Lucent, said: “We have, under The Shift Plan, made a firm commitment to divesting assets as and when the right opportunity arises for Alcatel-Lucent, and for the assets themselves. Today’s agreement with Madison Dearborn and CoVant represents the right opportunity for Alcatel-Lucent and LGS Innovations. We wish the LGS team well as they start a new chapter in their long and trusted service to the US Federal Government.”

“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. “We look forward to partnering with the management team and CoVant to the benefit of LGS Innovations LLC’s customers and employees.”

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