Alcatel-Lucent to sell LGS Innovations

Alcatel-Lucent has signed a definitive agreement for the sale of its subsidiary, LGS Innovations 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 Euro 1 billion and making selective asset sales to generate at least Euro 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 $ 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, Alcatel-Lucent said, “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, managing director, 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,” added Grissom.

Joseph Kampf, CEO, CoVant said, “We plan to capitalize 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.”

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