(Cincinnati & Atlanta; March 4, 2010) - - - Convergys Corporation (NYSE: CVG), a
global leader in relationship
management, announced today it has signed a definitive agreement
to sell its Human Resources Management (HRM) line of business to
NorthgateArinso, a leading global human resources software &
services provider, for approximately $85 million in cash at closing and
$15 million in cash over three years.
With its world headquarters in the United Kingdom, NorthgateArinso
has offices in 31 countries on five continents delivering services in
over 70 countries through a network of eight Service Delivery Centers.
NorthgateArinso's approximately 5,000 staff members serve more than 20
percent of the FORTUNE Global 500 companies, and it is one of the five
largest HR service providers in the world.
Convergys and NorthgateArinso believe this transaction represents a
unique opportunity for Convergys' HRM clients and employees to become
part of a larger, dynamically focused entity with a strong record of
accomplishment in the HR services business. NorthgateArinso will offer
employment to the approximately 2,300 employees of Convergys' HRM line
of business.
"This sale is a major step forward for our HRM
clients because NorthgateArinso is a global leader committed to
investing in the HRM business. Combining the assets of both companies
is transformational and will create one of the top HR specialist
companies in the world," said Jeff Fox, president and CEO of Convergys.
"This transaction with NorthgateArinso provides an opportunity for
Convergys to focus our investments and efforts on growing our Customer
Management and Information Management businesses.”
Convergys expects the transaction to close in the second quarter,
once all customary consents and regulatory approvals are received.
Jefferies & Company, Inc. acted as exclusive financial advisor to
Convergys.
Transaction Impact on Guidance
To provide a more comprehensive understanding of the company’s
underlying performance in 2010, Convergys is removing from its guidance
for continuing operations approximately $250 million in revenues, $20
million in earnings before interest, taxes, depreciation, and
amortization (EBITDA), and the $0.10 earnings per share (EPS) impact
related to the HR Management line of business. Convergys now expects
full year 2010 results from continuing operations to be as follows:
• Customer Management revenues of approximately $2 billion and
Information Management revenues of approximately $350 million
• EBITDA
of $310 million to $340 million
• EPS of $0.95 to $1.10
• Free
cash flow to exceed $150 million, plus an additional cash distribution
of approximately $40 million from the Cellular Partnerships
Convergys will take opportunities to further streamline the business
as they are identified. Any future restructuring actions are not
included in this guidance. Not included in the full year EBITDA, EPS,
and cash flow guidance for continuing operations are the 2010 impact of
the HRM business and this transaction, and approximately $0.05 per share
for the change in the president and CEO of the company.
Forward-Looking Statements Disclosure and "Safe Harbor"
Note:
This news release contains forward-looking statements that reflect
Convergys' expectations as of March 4, 2010. Actual results of
Convergys could differ materially from those discussed herein. For us,
particular uncertainties that could adversely or positively affect our
future results include: the behavior of financial markets including
fluctuations in interest or exchange rates; continued volatility and
further deterioration of the capital markets; the impact of regulation
and regulatory, investigative, and legal actions; strategic actions,
including acquisitions and dispositions; future integration of acquired
businesses; future financial performance of major industries which we
serve; the loss of a significant client or significant business from a
client; difficulties in completing a contract or implementing its
provisions; and numerous other matters of national, regional, and global
scale including those of the political, economic, business, and
competitive nature. These uncertainties may cause our actual future
results to be materially different than those expressed in our
forward-looking statements. Please refer to Convergys’ most recent news
releases and filings with the SEC for additional information including
risk factors. We do not undertake to update our forward-looking
statements as a result of new information or future events or
developments. This news release also contains non-GAAP financial
measures in order to provide the users of the financial statements with a
more comprehensive understanding of Convergys' underlying performance.
Webcast Presentation
Convergys will host a webcast to discuss this announcement today at
11:00 AM, EST. The webcast will be available through the following
link: http://tinyurl.com/ykvrekc
The webcast will also be available for replay through March 31, 2010.
About NorthgateArinso
NorthgateArinso is a leading global Human Resources software &
services provider offering innovative HR business solutions to employers
of all sizes, including Global Fortune 500 companies and many Public
Sector organizations. We help HR executives optimize their HR service
delivery through smarter process and more efficient technology,
supporting key HR areas like workforce administration, payroll,
benefits, recruitment, learning, and talent management.
Our 5,000 employees are dedicated to HR excellence through strategic
business consulting, outsourcing services, systems integration, and
best-of-breed software solutions. We are one of the five largest HR
service providers worldwide and have offices in 31 countries on five
continents.
About Convergys
Convergys
Corporation (NYSE: CVG) is a global leader in relationship management.
We provide solutions that drive more value from the relationships our
clients have with their customers and employees. Convergys turns these
everyday interactions into a source of profit and strategic advantage
for our clients.
For more than 30 years, our unique combination of domain
expertise, operational excellence, and innovative technologies has
delivered process improvement and actionable business insight to clients
that now span many countries and languages.
Convergys has been voted a Fortune Most Admired Company for nine
consecutive years. We have approximately 70,000 employees in 82
customer contact centers and other facilities in the United States,
Canada, Latin America, Europe, the Middle East, and Asia, and our global
headquarters in Cincinnati, Ohio. For more information, visit www.convergys.com
(Convergys and the Convergys logo are registered
trademarks of Convergys Corporation.)
Contacts:
Financial Analysts - David Stein
+1 513 723 7768 or investor@convergys.com
Business & Financial Media - John Pratt
+1 513 723 3333 or john.pratt@convergys.com
Trade & Social Media - Jeff Hazel
+1 513 723 7153 or jeff.hazel@convergys.com
