16 May 08. Booz Allen, a government and corporate consulting firm, will split its business in two and sell a stake in its government advisory branch to Carlyle Group, the Washington-based private equity firm known for hiring high-profile ex-government staffers and making investments in the defence sector. Carlyle will pay $2.54bn for a majority stake in Booz Allen’s government consulting business, which generates more than two-thirds of the firm’s revenue and is one of the US government’s biggest contractors. The purchase harkens back to Carlyle’s roots, which stretch deep into the defence industry. Booz Allen’s consultants are embedded on a range of US government telecommunications, intelligence and security projects. Carlyle’s investments have moved away from the increasingly richly priced defence sector in recent years. Carlyle’s investment in Booz Allen is one of the larger private equity-led investments this year outside the financial services sector. A scarcity of available debt due to the lending crunch continues to make large-scale buy-out deals nearly impossible. “After a long and deliberative process, we arrived at the conclusion that we’d be better off with two separate businesses that have strong collaborative agreements between them,” Ralph Shrader, Booz Allen chairman, told the FT. In an e-mail sent to staff late last year and seen by the FT, Mr Shrader said that the firm’s two businesses had “very different needs for operating and people models, regulatory requirements and capital funding”. The sale will let the 300 partners who collectively own Virginia-based Booz Allen cash in on their stakes in the company. Bank of America and Credit Suisse are helping to finance the deal. (Source: FT.com)
22 May 08. Computer Sciences Corp.’s fiscal-fourth-quarter profit dropped 29% on restructuring charges. The El Segundo, Calif., information-technology-services company said after the close of regular trading that results for the quarter ended March 28 included 29 cents a share in restructuring costs. Excluding those, earnings would have fallen to $1.44 a share from $1.58. (Source: WSJ)
20 May 08. Hewlett-Packard’s revenue climbed 11% to $28.26bn, helped by favorable exchange rates and strong sales of laptop computers. The company confirmed net income rose 16% to $2.06bn. H-P pre-reported earnings last week while confirming a deal to acquire Electronic Data Systems Corp. for about $13.25bn. The company said Tuesday that earnings rose 30% at its core personal computer business amid a 31% jump in notebook revenue, while desktop revenue was flat. Earnings in H-P’s printer unit – long its most profitable segment – were flat.
21 May 08. Qualcomm, the US chipmaker, has joined fellow telecoms technology groups Cisco Systems, Intel and Motorola by taking a stake in Ip.access, a UK-based pioneer in a new in-building wireless technology known as femtocells. Femtocells are similar to WiFi routers, but connect directly to 3G mobile phones. Ip.access, which is based in Cambridge, is developing the technology to allow operators to create 3G “hotspots” in their customers’ homes. 1Many mobiles contain 3G radio and WiFi, so femtocells can allow operators to improve indoor coverage and redirect traffic from their own networks to customers’ fixed-line broadband connections. Ip.access did not reveal the size of Qualcomm’s “strategic investment”, which follows a similar deal with Cisco in January. It has also raised undisclosed sums from venture backers, including Scottish Equity Partners, Rothschild Gestion and Amadeus Capital Partners. Stephen Mallinson, chief executive of Ip.access, said that it had been fully funded before Qualcomm’s investment. “It’s a way of tying in a strategic partner,” he said. “Qualcomm wants a little stake in the company so it can have an open dialogue.” Frederic Rombaut, head of Qualcomm Ventures Europe, added: “3G femtocells will have a very important role in future network architecture. Ip