Alcatel-Lucent SA (ALU) agreed to sell its LGS Innovations satellite-communications subsidiary for as much as $200 million, the network-equipment maker’s latest step in disposing of assets to reduce costs.
LGS, which also supplies optical routers and other secure-networking products and services to the U.S. security and defense industry, will be sold to a U.S. company owned by a Madison Dearborn Partners-led investor group that includes technology investor CoVant, Paris-based Alcatel-Lucent said today in a statement.
“We plan to capitalize on LGS Innovations’ competitive positioning and work to expand its presence within the U.S. government and drive its revenue by broadening its customer base, products, and solutions,” Joseph Kampf, chief executive officer of McLean, Virginia-based CoVant, said in the statement.
Alcatel-Lucent Chief Executive Officer Michel Combes has laid out plans to reduce the French manufacturer’s spending by 1 billion euros ($1.36 billion) and selling at least another 1 billion euros of assets by 2015, as well as focus on faster-growing businesses including ultra-high-speed Internet.
Alcatel fell as much as 0.8 percent and was trading down 0.6 percent at 3.30 euros at 10:08 a.m. in Paris. The stock has more than tripled this year, valuing the company at about 9.22 billion euros.
Half of the price will be paid when Chicago-based private-equity firm Madison Dearborn completes the LGS purchase in the first quarter of 2014, and the remainder will depend on the business’s earnings next year, Alcatel-Lucent said. U.S. authorities must approve the transaction.
To contact the reporter on this story: Adam Ewing in Stockholm at firstname.lastname@example.org
To contact the editor responsible for this story: Kenneth Wong at email@example.com