Information Services sells automation unit to UST for $27M in cash

Information Services said it has sold its automation unit to UST, a digital transformation solutions company, for $27M in an all-cash transaction, with a portion of the proceeds placed in escrow, to be released contingent upon meeting certain conditions. The unit offers robotic process automation software implementation and licensing services. It was established as a startup business in 2017 to meet the emerging demand for RPA. ISG chairman and CEO Michael Connors said the sale is a “win-win” for both ISG and UST. ISG received $20M in cash at closing with the remaining $7M held in escrow. Of this amount, $4M is to be released from escrow over the next 90 days as certain contractual conditions with clients are met, and the remaining $3M is to be released after the end of the first quarter of 2025, based on the achievement of certain revenue targets. Net proceeds from the transaction are expected to provide the opportunity to reduce debt and return capital to shareholders. To reflect the impact of the divestiture activity, ISG said it is updating its third-quarter guidance, targeting revenues in the range of $60M to $61M, and adjusted EBITDA in the range of $6.5M to $7M.