Computervision Corp needs to get shot of its Open Service Solutions Co because it could do with the cash, and the maintenance and service business is a distraction of which it would be glad to be shot. And it thought it had agreement for sale of the business, mainly the old Prime minicomputer maintenance business, […]
Computervision Corp needs to get shot of its Open Service Solutions Co because it could do with the cash, and the maintenance and service business is a distraction of which it would be glad to be shot. And it thought it had agreement for sale of the business, mainly the old Prime minicomputer maintenance business, last September, and was looking forward to receiving $100m cash to go some way to relieving its debt burden, plus $25m in preferred stock what was to have been called CV Services International Inc, and warrants for 19% of CV Services (CI No 3,007). The putative buyer was J F Lehman & Co, but that deal has now fallen through – but it does have another buyer lined up, although the agreement is very tentative, and the terms are much less attractive. The agreement is merely a non-binding letter of intent, the possible buyer is M D Sass Investors Services, a New York investment management firm, with affiliate entities, but the cash element has crashed to only $30m. Computervision, Bedford, Masssachusetts is also to be stuck with a 49% stake in the unwanted business, because M D Sass is not prepared to buy more than 51% immediately, and paying that $30m cash, plus $25m in a preferred note, and that 49% of the new company’s equity. M D Sass will retain the option to buy only another 10% of the company’s interest in the new entity. And that $30m will shrink to $25m after Computer- vision takes a $5m in previously deferred fees and expenses as a result of terminating the pact with J F Lehman. And it also expects a non-recurring charge in the first quarter for about $7m related primarily to completing the separation of its services business from the computer-aided design software company. Computervision said the agreement to sell Open Service Solutions to J F Lehman was terminated after it realized that financing was unavailable for a value that both parties could accept. M D Sass already owns 10 million shares of Computervision, representing a 16% stake.