Software industry

Alternative Resources Corporation Reaches Agreement with IBM to Terminate Escrow Agreement

Strategic Insights

Dec 28, 1998 — 1 min read

Alternative Resources Corporation has announced a significant milestone in its financial operations, agreeing with IBM to terminate an escrow agreement worth $20.0 million, related to its acquisition of CGI Systems, Inc. in November 1997. The agreement, valued at approximately $21.5 million, includes a payout of $10.1 million to IBM, $10.1 million to Alternative Resources Corporation, and $1.3 million to minority shareholders of CGI Systems. With this development, Alternative Resources Corporation is poised to receive its share of the proceeds, estimated to be around $10.1 million, prior to the end of 1998, with the funds to be used to further reduce the company's corporate debt.

Key Takeaways:

Alternative Resources Corporation has reached an agreement with IBM to terminate a $20.0 million escrow agreement related to its 1997 acquisition of CGI Systems, Inc.
The agreement involves a total payout of approximately $21.5 million, with $10.1 million going to IBM, $10.1 million to Alternative Resources Corporation, and $1.3 million to minority shareholders of CGI Systems
Alternative Resources Corporation expects to receive its share of the proceedings, valued at $10.1 million, prior to the end of 1998
The company plans to use the funds to further reduce its corporate debt
The agreement marks a significant milestone in the company's financial operations, following its acquisition of CGI Systems, Inc. in November 1997
Alternative Resources Corporation, a leading provider of information technology services, services Fortune 1000 and mid-sized clients in the U.S. and Canada

Statistics:

Total value of the escrow agreement: $20.0 million
Total value of the payout: $21.5 million
Allocation to IBM: $10.1 million
Allocation to Alternative Resources Corporation: $10.1 million
Allocation to minority shareholders of CGI Systems: $1.3 million
Anticipated receipt of Alternative Resources Corporation's share: prior to the end of 1998
Reduction in corporate debt: anticipated use of the funds

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