NorthgateArinso is the new owner of Convergys’ human resources management (HRM)  business for $85 million in cash at closing and $15 million in cash over three years.
 

Both providers believe this transaction represents a unique opportunity for Convergys’ HRM clients and employees to become part of a larger global 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.
 
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.
 
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.

Tags: Benefits, Contributors, Enabling Technology, Engaged Workforce, Learning, Multi-process HR, Payroll, Performance Management & Rewards, Relocation, RPO & Staffing, Screening & Selection, Shared Services, Sourcing, Talent Acquisition

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