The company took a buyout offer of $50 million for its North American and India assets from France's Capgemini. The bankruptcy filing is an effort to begin the intended process to make room for the sale of the business' operations.
The history of Ciber Inc.
The company was founded in 1974 and operates in the U.S., U.K. and Denmark. It also has centers in India, Vietnam and Poland, according to the Denver Post. After growing through acquisitions, Ciber employed nearly 8,600 people at one point. However, due to the decline in IT demand and performance in the European market, Ciber took a shot financially, which lead to its request for bankruptcy protection.
Before filing, Ciber entered a stalking horse agreement with Capgemini, for the sale of all assets of Ciber in North America and India. Under Section 363 of the Bankruptcy Code, this offer is subject to higher and better offers by counter-bidders. This is a positive move for Ciber, as Capgemini has a great reputation for success with its own clients. Because of this, Ciber's existing employees in North America and India will also profit from this agreement.
Taking the next step
To maintain its U.S. operations during the filing process, Ciber has committed to $41 million in debtor-in-possession financing. This allows the company to continue operating as usual until the settlement.
In a statement, President and Chief Executive Officer Michael Boustridge said that after careful consideration of all of Ciber's options, he feels filing for protection made the most sense for the company, employees, customers and stakeholders.
"With the advice and support of outside advisors, we've explored multiple paths, including selling the Company outside the bankruptcy process, selling certain assets of the Company, and other transactions to restructure the balance sheet or raise capital, while also focusing on attempting to improve sales, reduce costs, and exit underperforming operations," he said. "After careful consideration of the alternatives available to maximize the value of the Company, it's become clear that the best path forward for the Company, its employees, customers and stakeholders is to accomplish a sale through the bankruptcy process."
By taking this step, Boustridge believes he can preserve the commitment to all individuals involved, and streamline a steady transition for Capgemini.
"We are keenly focused on minimizing disruption to our customers, partners, and employees during the Chapter 11 process," he said. "The proposed sale will preserve jobs, ensure customers can benefit from continuity of services, and enable a smooth transition of Ciber's U.S. business to Capgemini or any other bidder providing a higher and better offer in accordance with Court approved procedures."
During this transition, Capgemini plans to prioritize streamlining the business with Ciber customers in North America, according to a statement. To preserve the value of the Ciber, Capgemini also plans to help the employees convert seamlessly so that they can continue helping their existing clients through what may seem like an intimidating and overwhelming process.
"Ciber's clients will benefit from the highest levels of service Capgemini is known to provide its clients while gaining access to enhanced capabilities and a global footprint. Ciber's employees, who bring with them a wide range of highly valued skills and expertise, will be offered new positions with similar terms within the Capgemini group and will benefit from joining a global leader in its markets," the written statement said.
With this approach, Capgemini will restore the business and preserve the value Ciber always intended to deliver in its assets.