Ciber To Sell Spanish Business For $7M, Advancing Efforts To Reimburse Wells Fargo

Ciber has agreed to sell its Spanish business to human resources consultancy ManpowerGroup, notching its second deal of the month as the company works to repay Wells Fargo $39.7 million.

Manpower has agreed to pay Ciber $7 million in cash and up to an additional $1 million in earnouts depending on the performance of a certain Ciber Spain contract over the next 24 months. The Greenwood Village, Colo.-based company, No. 43 on the 2016 CRN Solution Provider 500, said it plans to use $3.2 million of the transaction proceeds to reimburse Wells Fargo for an outstanding loan.

In connection with the sale, a Manpower subsidiary has agreed to advance Ciber $2 million of a $2.5 million escrow that would have otherwise been released in June 2017. That escrow will be satisfied by the early release of $2 million, and is connected to Ciber's June 2016 sale of its Netherlands operations to Manpower.

[Related: Ciber To Sell German, Danish Businesses for $8.8M As The Company Struggles To Repay Wells Fargo]

The Spain deal is subject to a $2 million tax escrow, to be released 90 days after closing, and $700,000 in general claims, to be released in $350,000 increments 12 and 18 months after closing. The transaction is expected to close by the end of February and is subject to the consent of Wells Fargo.

"The sale of Ciber Spain reflects continued execution against our plans to simplify our geographic footprint and focus our portfolio of offerings," Michael Boustridge, Ciber's president and CEO, said in a statement. Ciber did not immediately respond to requests for additional comment.

This deal comes just 12 days after Ciber agreed to sell its German and Danish businesses to German IT company Allgeier for $8.8 million. Ciber at the time said it planned to use half of the sale proceeds to help repay Wells Fargo, with the remainder needed to fund existing working capital needs.

Ciber agreed at the start of the month that it must deliver two letters of intent to Wells Fargo by Feb. 11 related to transactions with proceeds sufficient to repay the company's outstanding balance (Ciber has done this). From there, Ciber must close the deals and permanently repay Wells Fargo the $39.7 million by Feb. 28.

Wells Fargo's line of credit was supposed to mature May 7, but the bank accelerated the maturation date to the end of this month as part of the renegotiation process. The new agreement also limits Ciber's ability to borrow money for items not listed in the company's cash forecast provided weekly to Wells Fargo.

This setup replaced a previous arrangement with Wells Fargo that would have required Ciber to close a transaction by Jan. 31 netting proceeds of at least $25 million.

Ciber shares have recovered 8 cents, or 27.6 percent, to 37 cents since the sale of its German and Dutch businesses was revealed Feb. 3, and remain unchanged in trading Wednesday morning. The New York Stock Exchange told Ciber in November that it is at risk of being delisted due to its average closing price being below $1 per share for 30 days in a row.

Manpower said the deal will enhance its ability to deliver best-in-class IT staffing solutions, and complements the organic growth of Experis, its professional resources and project-based workforce solutions arm. The company currently employs more than 600 in Spain, offering clients a broad range of staffing, development and workforce management solutions.

"Ciber Spain's deep industry knowledge and expertise are a natural fit within the ManpowerGroup family, and will help us continue to shift our business mix towards higher-value services for both clients and candidates," Raul Grijalba, ManpowerGroup Spain's executive president, said in a statement.

In addition to Spain, Germany and Denmark, Ciber has unloaded three other of its European business units this summer. The company sold its 400-employee Netherlands business to Manpower in June for $25 million, its 130-employee Norway business to Manpower in August for $7 million, and its Swedish Business to Bouvet Stockholm in September for $1 million.

Ciber had also been planning to sell its $10 million Australian business to local management, but the company said in August that the deal had fallen through.