GE Global eXchange Services has been sold to buy-out fund Francisco Partners which said it plans to acquire other companies and staff to build up the ailing GXS brand.
With a presence in 58 countries, GXS has engineering teams in the US, Ireland, the UK, India and the Philippines. More than 100,000 trading partners use GXS, which has a customer list that includes Eastman Kodak, DaimlerChrysler and 3M.
Harvey Seegers, current president and CEO of GXS, will continue to lead the company and GE will retain a 10% ownership stake in the firm.
Seegers believes GXS will prosper as a part as a part of the Francisco Partners portfolio. ‘When you’re a small part of a big company, you’re almost always standing at the end of the line when capital requests are being considered. In this particular case, at a technology fund, you’re almost always at, or near, the front,’ he said.
Francisco will acquire access to over 100,000 trading partners currently operating with GXS, including 60% of Fortune 500 firms, General Electric said.
The deal will be closed by 31 October and the divestiture is expected to result in a pre-tax gain of approximately $500m to GE, the company said.
Francisco Partners is a voracious acquirer of technology companies. It claims that over the last five years to have invested in excess of $1bn in more than 20 technology and technology-related companies with a combined enterprise value exceeding $4bn.
The company specializes in taking over subsidiaries of major corporations that are no longer considered core by their parents. Francisco Partners then provides what it calls ‘transformational capital’ to try and create a thriving concern.
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