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Ciber To Get $15M On Infor Sale As Bank Deadline Nears
Ciber will get $15 million from the sale of its Infor business and plans to refinance existing debt to repay Wells Fargo $28.2 million by March 31.
The Greenwood Village, Colo.-based company, No. 43 on the CRN Solution Provider 500, said the deal with Infor might be terminated if the closing doesn't occur by Friday. Ciber has additionally pledged as part of the purchase agreement to not solicit acquisition proposals, according to a filing Tuesday with the U.S. Securities and Exchange Commission (SEC).
Ciber typically only uses a portion of sale proceeds to reimburse Wells Fargo since the remaining money is needed to fund working capital needs. For example, $3.2 million of the $7 million of proceeds from the February sale of Ciber's Spanish business, and $4.4 million of the $8.8 million in proceeds from the February sale of its German and Danish businesses went toward repaying Wells Fargo.
[RELATED: Ciber Agrees To Sell Infor Practice Unit]
Ciber didn't indicate how much of the $15 million in proceeds from the Infor transaction will be allocated to reimbursing Wells Fargo, and didn't respond to CRN's request for comment. The company's stock was up $0.02 (4.14%) to $0.50 a share in pre-market trading Tuesday.
A refinancing of Ciber's debt will close simultaneously with the sale of its Infor business unit, according to the SEC filing. Following the sale and the refinancing, Ciber said it would be able to pay liabilities as they become due in the usual course of business.
As part of Ciber's agreement to sell its Infor practice back to Infor, the company promised not to hire any employees transferred to Infor within the next three years, and not solicit existing customers of its Infor practice within the next two years.
The transition is additionally subject to at least 90 percent of Ciber's Infor practice workforce – and all of the identified key business employees – accepting offers of employment with Infor, according to the SEC filing.
Ciber was Infor's partner of the year in both 2014 and 2015, providing ERP implementation and upgrade services, human capital management, cloud and managed services, and business intelligence and integration services.
The business unit focuses on the healthcare and life sciences, public sector and education, discrete manufacturing, retail and consumer products, and process manufacturing verticals.
The company told the SEC in February 2016 that losing its Infor relationship could lower revenue, result in increased sales and marketing costs, lead to longer sales cycles, harm Ciber's reputation and brand recognition, and adversely affect the results of operations. The company's North American Infor independent software vendor (ISV) business grew in 2015, according to Ciber.
Ciber told the SEC last week that it had failed to strike a deal by March 15 with proceeds sufficient to cover its 13-week cash forecast, which was one of the conditions of a March 3 agreement with Wells Fargo.
Without alternative financing or proceeds with mergers, acquisitions or other transactions, Ciber CFO Christian Metzger said the company would be unable to repay its balance of Wells Fargo by the end of the month.
"Without a transaction sufficient to address the company's financial situation, the company expects to conclude … that there is substantial doubt about the company's ability to continue as a going concern," Metzger wrote in a SEC filing Friday afternoon.