UXC does the numbers on trade sale

IT services group UXC Limited has informed shareholders that it is engaged in due diligence for a potential sale of the company to an unnamed suitor.

UXC Limited - which owns an IT Group that includes the Red Rock Consulting (Oracle integrator), Oxygen (SAP integrator) and Eclipse (Microsoft CRM and BI integrator) brands, the former Getronics business (now UXC Connect) and the XSI data storage business, is among Australia's largest IT service providers.

The IT Group is performing well, with UXC flagging "record EBITDA earnings" for the full year on turnover in excess of $450 million.

UXC chief financial risk officer Rowan Cole said the companies within the IT Group are performing "consistently well across the board."

But as flagged in UXC's last half yearly report, the solid gains made by the IT Group are being dragged down by the relatively poorer performance of its Field Solutions Group, which provides outsourcing services to utilities companies.

The directors of UXC have subsequently been investigating options for divestment of one or both parts of the business - or the business as a whole - and has charged an internal M&A (merger and acquisition) team with formulating a strategy to drive "greater shareholder value."

The company informed shareholders late last week that it will conduct due diligence on a sale offer for the full UXC business (including IT and Field Solutions) until the end of July, 2010, before making an announcement on its future.

UXC executive chairman Geoff Lord and finance director Mark Hubbard are absent on leave at present.

UXC shares have dropped from 80 cents per share to 45 cents per share since November 2009, but have gained 8 cents per share since Friday's announcement.