End Of An Era: HTC Global Closes $90.7M Purchase of Solution Provider Ciber

HTC Global Ventures completed its $90.7 million acquisition of Ciber Thursday, capping off a 43-year run for the onetime international IT services giant.

Troy, Mich.-based HTC, No. 189 on the 2017 CRN Solution Provider 500, amended its purchase agreement for Greenwood Village, Colo.-based Ciber, No. 43 on the 2016 CRN SP 500, to reduce the purchase price by $2.3 million and increase the assumption of certain Ciber liabilities, according to a filing Friday with the U.S. Securities and Exchange Commission.

Ciber filed for Chapter 11 bankruptcy protection in April after defaulting on its credit facility from Wells Fargo, which had an outstanding balance at the time of $28.5 million. The company said in the SEC filing that $35.7 million of the HTC sale proceeds were used to pay off the debtor-in-possession financing facility, which gave Ciber the liquidity needed to maintain its operations during the Chapter 11 process.

[RELATED: HTC Global Outbids Capgemini With Surprise $93M Offer For Ciber]

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HTC will take possession of Ciber's $275 million North American and Indian businesses as well as its roughly 3,550 employees in the regions. HTC was the surprise winner of a May 17 auction with a $93 million bid, well above the $50 million "stalking horse" agreement Ciber reached with Paris-based Capgemini, No. 6 on the 2017 SP 500, as part of April's bankruptcy filing.

"The purchaser is uniquely position to acquire the purchased assets [Ciber] as HTC Global has the capabilities and experience in delivering similar services and solutions spanning across a large number of clients in multiple industries," Madhava Reddy, HTC's president and CEO, wrote in a May 18 court filing.

Ciber's stock is up $0.01 (10.11%) to $0.14 per share in trading Friday morning. The company's stock had been trading as low as $0.02 per share in mid-May prior to HTC placing its winning bid.

Ciber is evaluating its options with respect to the sale of its remaining immaterial assets and the winding down of the company, according to the SEC filing. Cash distributions to Ciber shareholders will be made pursuant to a liquidation plan, and the size of the distribution will be affected by any filed claims against Ciber, the monetization of remaining real estate assets, and the payment of Ciber's expenses.

The company said it is therefore unable to predict whether shareholders will receive any cash distributions or the amount of any such distributions. HTC and Ciber did not immediately respond to requests for comment.

HTC has been on the acquisition trail as it looks to dramatically scale up from roughly $325 million of revenue in 2015 to $1 billion of yearly sales by 2020. Roughly half of that growth is expected to come from the December 2014 purchase of health-care IT services provider CareTech solutions, HTC said in 2015.

HTC is a privately held company with nearly $99 million in assets and approximately $45 million in liabilities as of the end of 2015, according to Reddy's court filing.

Ciber was founded in 1974 and grew to more than 8,600 employees and $1 billion in annual sales through an aggressive acquisition strategy. But by 2016, Ciber's total revenue was down to just $610 million, while its headcount had decreased by nearly 75 percent.

The company's most recent problems began in 2014 as customers began to leave, making it difficult for it to return European operations to profitability. Ciber had contracts with companies including Microsoft and Oracle to install customized versions of those companies' products in client ecosystems.

In late 2014, Ciber began laying off employees and selling off business units in Finland, Germany, the Netherlands, Norway, Spain and Sweden under new CEO Michael Boustridge. Boustridge took over in mid-2014 after former CEO Dave Peterschmidt retired amid the company's extensive restructuring efforts.