MarchFirst has sold its central region business unit, and other offices and assets to Divine, Inc., a Chicago-based web enterprise solutions company.
The company is receiving $6.25 million at closing, an additional $27.75 million note payable over not more than five years, and up to an additional $39 million payable over five years which is contingent on the unit’s future performance.
MarchFirst also has entered into an agreement with Divine for the sale of its SAP practice, its VAR business and other assets, which may include HostOne and its interest in BlueVector LLC, subject to anti-trust approval. The company expects this transaction to close promptly.
The purchase price for these business units and assets is $6.25 million at closing, an additional $29.75 million note payable over not more than five years, and up to an additional $16 million payable over five years which is contingent on the units’ future performance.
The operations sold as part of these transactions comprise 2,100 employees, which include the SAP practice headquartered in Denver and 19 other offices, including Austin, Chicago, Cincinnati, Cleveland, Columbus, Ohio; Dallas, Detroit, Grand Rapids, Houston, Indianapolis, Irvine, California; Los Angeles, Milwaukee, Minneapolis, Pittsburgh, Santa Monica, St. Louis, Hong Kong and Toronto, Canada.
In addition, MarchFirst announced that the maturity of its loan agreement with American National Bank and Trust Company of Chicago has been extended through June 15, 2001. The company continues to have significant liquidity difficulties and is pursuing alternatives to satisfy obligations to the bank and other creditors and meet the needs of its employees and clients.
The company is actively pursuing sales of other business units. To increase the value of these individual units, MarchFirst has cut its workforce by 1,700 jobs or 30% of the staff. It is also closing its Australian operations.