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Struggling Ciber Explores Strategic Alternatives

Ciber's Board of Directors has retained a strategic adviser to assist the troubled company with exploring alternatives such as M&A activity, divesture or disposition of assets.

Ciber's board of directors is getting help from a strategic adviser as it ponders whether to sell out, sell off or find some other business combination that keeps the company going.

The Greenwood Village, Colo. company, No. 43 on the CRN Solution Provider 500, disclosed the move with the U.S. Securities and Exchange Commission (SEC) late Monday, adding that no decision has been made as to whether the IT solutions provider will engage in a transaction following the examination of strategic alternatives.

Ciber's has seen double-digit sales declines, the selling off of three of its European business units and a 71 percent drop in the company's stock price this year. CEO Michael Boustridge told investors in August that Ciber will spend the rest of 2016 exploring potential business divestiture opportunities in Europe after international revenues fell by 21 percent in the most recent quarter.

[RELATED: Ciber CEO: Return to Growth, Profitability 'Painfully Slow' As Stock Hits All-Time Low]

Potential strategic alternatives for Ciber could include could financing, refinancing, a merger, acquisition, joint venture, divestiture, or other disposition of some or all of the company's assets, according to the SEC filing. The early reaction from Wall Street has been favorable, with Ciber's stock up 1 percent in after-hours trading to $1.03 per share.

Ciber said there could be no assurance that any transaction will occur, and - if a transaction were to occur - the timing or terms of such a move. The company did not immediately respond to a request for additional comment.

The solution provider began unloading some of its European business units this summer, selling its 400-employee Dutch business and 130-employee Norway business to ManpowerGroup in June and August for $25 million and $7 million, respectively. Last month, Ciber sold its Swedish business to Bouvet Stockholm of Oslo, Norway.

However, Ciber said in August that its agreement to sell its $10 million Australian business to local management fell through. The company is now evaluating alternative options since Ciber's Australian business isn't aligned with operations in other countries, Chief Financial Officer Christian Metzger said in August.

The divestitures began just a month after Ciber announced that Mark Floyd -- one of three new independent directors added to the board in 2015 as part of an agreement between the company and activist investor Lone Star Value -- would become its chairman, replacing company founder and former Chairman Bobby Stevenson.

Ciber's financial performance has been lacking as of late, with sales in the quarter ended June 30 falling 16.2 percent to $165.9 million and net loss from continuing operations coming in at $51.7 million, down from a $1.2 million net gain the year prior. In the first quarter of 2016, Ciber's sales fall 11 percent to $175.1 million, and the company delivered a net loss from continuing operations of $95.3 million.

Ciber's stock had never traded below $1.94 per share in its 22-year history as a public company until the company disclosed its first quarter results in May of this year. Since that time, Ciber's stock has not traded higher than $1.92 per share, bottoming out at 94 cents a share in August.

In the first half of 2016, Ciber's stock performed the worst of any of the 25 major publicly-traded solution providers and distributors in North America, according to a CRN analysis. Ciber's stock price fell by 57.3 percent during that time, from $3.51 at the start of 2016 to $1.50 on June 30.

Internally, Ciber is just as big of a mess as its share price would indicate. Ciber said in an August SEC filing that it erroneously issued bonus payments of $760,000 and $100,000 to Boustridge and Metzger, respectively, on June 29, that were not authorized by the Board of Directors' Compensation Committee due to miscommunication at the committee level.

Boustridge and Metzger have agreed to repay the money, and the Board's Audit Committee is "reviewing the circumstances that gave rise to the control deficiencies that led to such erroneous bonus payments," according to the SEC filing.

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