ePresence Throws in the Towel

ePresence has decided to call it “quits.”

The Westboro, Mass.-based company has decided to sell its Security
Services Business operations to Unisys Corp. for approximately $11.5 million in cash.

In doing so, ePresence will be taking the first step toward liquidating its assets, a
plan that its board of directors has unanimously recommended to shareholders.

As part of the plan of liquidation, ePresence will also divest most of its 51.4 percent stake in Switchboard Inc. , the Internet yellow pages and online advertising solutions provider.

Unisys is buying the security unit in order to move further into the security and identity management services space. The Blue Bell, Pa.-based computing giant has decided that identity management will be a key plank of its overall enterprise business security strategy. The company, which specializes on the Microsoft Windows platform in an Intel environment, plans to market a variety of identity management solutions, which will include a variety of technologies including smart cards, biometrics, public key infrastructure and software tools for identity management.

Unisys said the ePresence acquisition will add to its Zero-Gap Security
Services unit, which involves “consulting, architecture and planning,
design, implementation and management services and solutions that enable
clients to address security requirements at all levels of their business.”

Unisys said it expected the transaction to close in the fourth quarter and will require shareholder approval.

ePresence’s board came to the conclusion to toss in the towel after it hired SG Cowen as financial advisors to explore various options for its businesses. ePresence said it will file a proxy statement seeking shareholder approval on its liquidation plans.

As part of the plan, ePresence is expected to sell 8.8 million common shares of Switchboard in a firmly underwritten offering. At the completion of the offering, ePresence will continue to own 7.9 percent of the Switchboard’s stock. If the over-allotment option is exercised and the additional 1,322,250 shares are sold, ePresence will no longer own any shares of the company.

If ePresence shareholders approve the board’s plan of liquidation, then ePresence expects it will pay out $1.10 to $1.40 a share in one or more cash distributions over time, excluding its Switchboard investment. As of Sept. 30, ePresence had $44.2 million in cash and marketable securities, outside of its majority stake in Switchboard.

Separately, Switchboard Thursday reported a 22 percent revenue increase in the third quarter while its bottom line swung into the black. The company, which shares the same headquarters as ePresence, said it is experiencing growth in its recently “deployed
performance-based local advertising offerings including LocalClicks and content-targeted advertising programs such as those utilized through our agreement with Google.”