ASX-listed services outfit, UXC (ASX: UXC), has announced that it has entered a period of due diligence during which it will negotiate the potential sale of the company.
As reported by Computerworld Australia, UXC announced in February that it was embarking upon a strategic review to examine ways to unlock greater shareholder value.
In its financial report lodged with the ASX at the time, the company said the alternatives included turning to private equity and a possible demerger.
In a recent ASX posting, the company said it had, in the preceding four months, entered into a number of talks with “significant parties” around a potential full bid for the company.
The current negotiations under due diligence, with an as-yet undisclosed party, are due to expire at the end of July.
In the ASX statement the company said its IT Group, which includes business solutions and professional services, was trading very strongly and on track for a record EBITDA and full year revenue of $450 million.
Its field solutions group was “trading satisfactorily", however the cancellation of a number of government programs, including the insulation rebate scheme, were likely to result in a significant reduction in revenues to $270 million.
In its financial report, issued in February, UXC said losses and charges of $16.8 million at the EBITDA level to cover major issues in the environmental area –including the collapse of the market price for Renewable Energy Certificates, the cancellation and/or abrupt revision of several government programs in the environmental sector – had been incurred.
“Additionally, rebates available on the government’s home insulation and solar programs were abruptly cut, and the quoting mechanism on the insulation program was also changed after commencement of the program,” the report reads.
“As a result, UXC’s insulation activities became economically unsustainable, and were closed in the first half after the incurrence of start up costs not recovered.”
Since then the company has announced a number of major contract wins, including a $16 million deal with Defence to update the technology platform supporting Defence's Human Resources Management System (PMKeyS).
It also picked up two new smart meter contracts with Integral Energy via subsidiary Skilltech Consulting Services, worth $28.65 million.
A $2.5 million managed voice services deal with the Department of the Prime Minister and Cabinet was also snared.