COPENHAGEN: Ciber has agreed to sell its German and Danish businesses to German IT company Allgeier, advancing Ciber’s efforts to repay Wells Fargo $39.7 million for an outstanding loan.
The Greenwood Village, Colo.-based company, No. 43 on the CRN Solution Provider 500, said it plans to use up to half of the sale proceeds to reimburse Wells Fargo, with the remaining money needed to fund existing working capital needs.
Ciber will receive proceeds from the deal in three separate installments: at closing, in March 2018, and in March 2019. Part of the purchase price is contingent on the Ciber business unit hitting operation performance targets in 2017 and 2018.
“The sales of Ciber Germany and Ciber Denmark is consistent with our announced strategy to divest non-core assets,” Michael Boustridge, Ciber’s president and CEO, said in a statement. Ciber did not immediately respond to requests for additional comment.
Under Ciber’s previous agreement with Wells Fargo, the company had until Jan. 31 to close a transaction yielding proceeds of at least $25 million. But on Wednesday morning, Ciber filed a notice with the U.S. Securities and Exchange Commission (SEC) laying out alternate ways for the company to fulfill its obligation to Wells Fargo.
As part of the new agreement, Ciber must do the following: deliver two letters of intent to Wells Fargo by Feb. 11 with other parties interested in transactions with net proceeds sufficient to repay the company’s outstanding balance (Ciber has done this); have Wells Fargo be satisfied that the parties remain in good faith negotiations; and close the deals and permanently repay Wells Fargo the $39.7 million by Feb. 28.
Ciber said it expects to close the sale of its German and Danish businesses this month following the receipt of regulatory approvals. Ciber’s German business accounts for nearly half of the company’s international revenue and has suffered from high levels of attrition, Boustridge said in November, forcing the company to hire subcontractors to fulfill its contractual duties in the country.
