EDS said it has agreed to sell a software development unit to three buyout firms for $2.05 billion in cash as part of a plan to sell assets outside its core business.

Under the terms of the deal, Plano, Texas-based EDS will sell its UGS PLM Solutions division to Bain Capital, Silver Lake Partners and Warburg Pincus. The three funds will each hold an equal stake in the unit.

The purchase, expected to close within 90 days, represents the largest-ever investment by private equity firms in a technology company, with the purchase price about 2.3 times the unit's annual revenue, according to EDS.

Warburg Pincus Vice Chairman Bill Janeway told Reuters the deal was attractive because UGS PLM is an established company that generates cash and has customers ranging from General Motors Corp. to Boeing Co. At the same time, its revenue is increasing at a rate of 15 percent to 20 percent.

By: DocMemory
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