McDonnell agrees to IT buyout

Click to follow
The Independent Online
THE second-biggest British- owned information technology company was formed yesterday when McDonnell Douglas, the US aerospace giant, agreed to sell its information systems business to a management-led buyout team for pounds 150m to pounds 200m, writes Michael Harrison.

The buyout, which is being supported by a group of banks and institutional investors led by Baring Capital Investments, will make the Hertfordshire-based company the largest British information technology business after Logica.

McDonnell Douglas Information Systems International has a turnover of pounds 180m and last year made operating profits of around pounds 20m.

It employs a total of 1,800 people, of whom 1,300 are based in the UK.

Although the company has customers throughout Europe, Australasia and the Pacific Rim, two- thirds of its turnover comes from the UK.

Its biggest customers in Britain are public sector bodies such as the National Health Service, central and local government, police forces and libraries.

The firm's management, led by Jeremy Causley, chief executive, will take an undisclosed equity stake and retain day-to-day control.

The eventual plan is to float the business on the stock market.

All the equity is being underwritten by Baring Capital Investors, with banks providing the remaining loan finance.

The deal, which is subject to various approvals, is expected to be completed soon.