Alcatel-Lucent has agreed the sale of LGS Innovations LLC, a subsidiary that sells communications technology and support services to the US Federal Government, for up to $200 million.
The purchaser, a group of investors led by private equity firm Madison Dearborn Partners, will pay Alcatel-Lucent $100 million up front and then up to a further $100 million depending on the financial performance of LGS.
LGS Innovations is an independent subsidiary of AlcaLu, with about 650 staff, that is dedicated to delivering technology (optical, IP, security, and so on) and supporting integration and research services to Federal Civilian Agencies, the Department of Defense, and the Advanced Programs community. "We are the U.S. Federal Government's one-stop shop for all its networking and communications needs -- from infrastructure requirements including facilities management, to network architecture and network operations, to broadband and wireless networking solutions, to systems engineering, professional consulting services, and telecommunications products," notes LGS on its website.
The divestment is part of AlcaLu's Shift Plan, which aims to make the vendor leaner and more profitable by focusing on a reduced product portfolio (built around its IP division), reducing headcount and selling non-core assets. (See Alcatel-Lucent to Cut 10,000 Jobs and Alcatel-Lucent Builds Future Around IP.)
The announced divestment of LGS will be seen as further proof that CEO Michel Combes is delivering against that plan.
— Ray Le Maistre, Editor-in-Chief, Light Reading