ICG Group To Sell Procurian To Accenture For $375 Mln In Cash

(RTTNews) - ICG Group Inc. (ICGE) said Thursday that it has agreed to sell its subsidiary and procurement business solutions provider Procurian Inc. to technology outsourcing and consultancy giant Accenture plc (ACN) for $375 million in cash, subject to certain adjustments at closing.

The transaction is expected to close in the fourth quarter. Shares of ICG Group are gaining more than 14 percent following the announcement.

King of Prussia, Pennsylvania-based Procurian is procurement BPO provider globally. The company focuses on delivering strategic sourcing business process services to the Global 2000.

Procurian has delivery locations in the United States, India, the United Kingdom, the Czech Republic, China and Brazil. The company's approximately 780 employees are expected to join Accenture in connection with the transaction.

Radnor, Pennsylvania-based ICG Group noted that the sale of Procurian will enable it to emerge as a high-growth, pure-play cloud computing company.

For the six months ended June 30, 2013, ICG's cloud computing businesses achieved organic revenue growth of 37 percent from the prior year period. According to the IDC, the rapidly-growing cloud computing market is growing at roughly six times the rate of the broader software industry.

ICG expects to realize proceeds of about $324 million in connection with the sale. The company said that the proceeds will be held in escrow and will be subject to potential indemnification claims. ICG does not expect to owe any income taxes in connection with the transaction.

Walter Buckley, Chief Executive Officer of ICG said, "Under the outstanding leadership of Carl Guarino and the stellar team at Procurian, this company has become an industry leader in procurement, and we look forward to watching that success continue as part of Accenture."

ICG also said that its board of directors has authorized the expansion of its existing share repurchase program to $150 million from $50 million. To date, the company has deployed about $36 million to repurchase shares, leaving about $114 million for repurchases under the program.

Separately, Accenture said the acquisition of Procurian will enhance its capabilities in procurement business process outsourcing or BPO across a range of industries including consumer goods, high-tech and financial services, and will add key analytics capabilities and technology assets.

Mike Salvino, Accenture's group chief executive for BPO said, "The addition of Procurian's deep strategic sourcing category expertise, advanced analytics capabilities and delivery resources will complement and scale our already-significant sourcing and procurement business services. As a result Accenture will be even better positioned to provide clients around the world with 4th- and 5th-generation BPO procurement services to drive real and sustainable business outcomes."

In Thursday's regular session, ICGE is trading at $16.00, up $1.98 or 14.12 percent on a volume of 330,694 shares. ACN is trading at $73.36, down $0.15 or 0.20 percent on a volume of 216,315 shares.