Ness Technologies bought by Citi unit for $307m.

By SHMULIK SHELAH/GLOBES
June 13, 2011 04:13

CVCI will pay $7.75 per share for Ness, 17.6 percent over the company’s closing price on Nasdaq on Thursday.

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financial graph 311. (photo credit: stock photo)

IT services and solutions company Ness Technologies Ltd. announced on Friday that Citigroup Inc. unit Citi Venture Capital International will acquire the company for $307 million in cash.

CVCI will pay $7.75 per share for Ness, 17.6 percent over the company’s closing price on Nasdaq on Thursday. Ness’s board of directors recommended that the shareholders approve the deal.

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Ness CEO Sachi Gerlitz described the acquisition as a new beginning and said that he believed the company would continue to operate. He told Globes, “In my opinion in another four years the company could be in line for a renewed public offering.”

Gerlitz was appointed CEO in 2007, when the company’s market cap was close to a record $600 million, but the company has gone through hard times since then. Ness’s share price tanked as the global economic crisis hit US financial institutions, and the improvement in the company’s 2010 results did not help much.

One reason for the stagnation is the wide range of operations by the 7,000-man company, which the capital market does not care for. In Israel, where Ness began 13 years ago, the company is back on its feet. However, the company’s Central European operations have been hard hit due to the recession there in the past two years, and the performance by the company’s US operations has been poor in the past year, forcing major restructuring in the first quarter of 2011.


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