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  EDS said it has reached a definitive agreement to sell its UGS PLM Solutions unit for $2.05 billion in cash to a group of three private equity firms: Bain Capital, Silver Lake Partners and Warburg Pincus.
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The transaction is expected to close within 90 days, pending customary closing conditions.

“The transaction is another tangible step in the strategic plan we laid out for investors in June 2003,” said EDS Chairman and CEO Mike Jordan. “We said our ongoing focus will be strengthening our core information technology and business process outsourcing operations and our balance sheet. This transaction supports both priorities and further enhances our competitive position.”

Upon closing the transaction, EDS expects to be closer to its announced goal of zero net debt (total debt minus cash and marketable securities on hand) by the end of 2004.

The decision to divest UGS PLM Solutions through an IPO or private sale was announced in October 2003.

“The purchase price clearly shows the strength and potential of this business. The private equity group is receiving an excellent operation, while we bolster our competitive position,” said EDS CFO Bob Swan.

Swan said the decision to divest the full unit reflected the significant interest the divestiture generated — and the purchase price, which is about 2.3 times annual revenue. In 2003, UGS PLM Solutions generated $897 million in revenue and $104 million in net income.
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