VAR FusionStorm Sells Jeskell Division

FusionStorm has sold its Jeskell division, which primarily catered to government business, and will concentrate on commercial business going forward.

While the sale of Jeskell gives FusionStorm the opportunity to focus on what it called its growing commercial business, it also gives the company the cash needed to settle a lawsuit brought against it by Technology Integration Group (TIG) over alledged improper hiring practices.

San Francisco-based FusionStorm on Tuesday said it sold Jeskell to the principals of CAS Severn, a Laurel, Md.-based government solution provider which, like Jeskell, has a strong IBM business.

FusionStorm did not disclose terms of the deal other than to say that it sold most of the assets of Jeskell in an all-cash transaction.

FusionStorm acquired Jeskell four years ago this month. At that time, FusionStorm was one of Sun Microsystems' largest partners, while Jeskell was IBM's biggest government solution provider.

Next: Cash To Pay Off The Lawsuit?

The sale of Jeskell has been expected in the wake of San Diego-based TIG's successful lawsuit against FusionStorm as a way for FusionStorm to raise the cash needed to settle that lawsuit.

The lawsuit ended in August when the two reached an out-of-court settlement after a California Superior Court jury found FusionStorm liable for misappropriation of trade secrets, breach of fiduciary duty and breach of loyalty.

FusionStorm at the time agreed to pay TIG nearly $11 million to resolve the case, covering all damages, expenses and legal fees. The date of the settlement was extended a number of times in order to give FusionStorm time to gather the resources to pay those costs.

The settlement brought to a close a bitter court battle between TIG, which ranked 155 on the VAR 500 with $267 million in sales, and FusionStorm, which ranked 115 with $437 million in sales.

TIG sued San Francisco-based FusionStorm in 2007, charging that FusionStorm, several of its executives and several former TIG employees engaged in unethical business practices related to FusionStorm's move to set up a branch office in Tampa to compete with TIG.

Next: Details To Come

Executives of FusionStorm, CAS Severn, and TIG were unable to comment on the acquisition by publication time.

However, Daniel Serpico, president of FusionStorm, said in a statement, ’We have continued to realize record growth in our commercial business across the country and we decided that if we focus solely on this core business, we can deliver more value to our clients and our partners, while continuing growth and profitability.’