EDS considers selling UGS PLM Solutions9 Feb, 2004
(2/9/2004) EDS (Electronic Data Systems) issued a statement saying that several parties have shown significant interest in acquiring its UGS PLM Solutions subsidiary. EDS is now considering the private sale of up to 100% of UGS PLM Solutions in addition to its previously announced plan to sell a minority stake through an IPO (initial public offering). EDS says its expects the valuation of a private sale of a majority stake to exceed two times UGS PLM Solutions’ 2003 revenues of almost $900 million.
EDS spokesperson Jeff Baum says the company should have more to say about its plans in the next month or so. EDS won’t divulge any details about the companies interested in UGS PLM Solutions, which develops Unigraphics NX, I-DEAS NX, Solid Edge, Teamcenter, E-Factory, and the Parasolid modeling kernel.
The statement responds to a report in the Financial Times that EDS had halted its plans for an IPO after receiving “solid interest” in a private sale. Last week, EDS reported a loss of $354 million for the fourth quarter and a total loss of $1.7 billion for 2003. Revenue for UGS PLM Solutions, however, rose 8% to $248 million, which EDS attributed to strong demand for Teamcenter software and high acceptance of its NX CAD solutions. The fourth-quarter loss and free cash shortfall prompted Standard & Poors to put EDS on credit watch, which could result in a downgrading of its credit rating.