Alcatel-Lucent Shifts LGS Out to Private Equity

December 20th, 2013 by · Leave a Comment

As the year winds down, Alcatel-Lucent is checking one more item off its list of stuff to find new homes for.  They're  selling the LGS Innovations unit to a private equity group led by Madison Dearborn Partners and CoVant.  LGS is the piece of Bell Labs that was separated out from Lucent in the Alcatel-Lucent merger of 2006 to provide various network services for the US federal government.

The sale of LGS Innovations will raise up to $200M for Alcatel-Lucent, although they only get half of it at closing with the other half depending on LGS's results next year.  That $200M is a significant chunk of the €1B of selective asset sales they've targeted by 2015 as part of the Shift Plan they have been following under CEO Michel Combes.

As for what the new owners have in mind for LGS going forward, it's too early to say.  A decent guess though is that they will streamline it, try to generate some post-Alcatel momentum, and then do what private equity usually does five years after they buy something like this. (Three guesses...)

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Categories: Mergers and Acquisitions · Telecom Equipment

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