Stock Markets
Alight finalizes sale to H.I.G. Capital for up to $1.2 billion
CHICAGO – Alight, Inc. (NYSE: ALIT), a prominent provider of cloud-based human capital technology and services, has completed the sale of its Payroll & Professional Services business to an affiliate of H.I.G. Capital, the company announced today.
The deal, which was previously disclosed, includes a transaction value of up to $1.2 billion, comprising $1 billion in upfront cash and up to $200 million in seller notes, with $150 million contingent on the newly named Strada meeting certain financial targets by 2025.
The sale is expected to significantly reduce Alight’s debt, with anticipated net leverage ratio falling below three times. Proceeds from the sale are slated for debt reduction, share repurchases, and general corporate use.
Stephan Scholl, CEO of Alight, described the sale as a strategic milestone that enhances the company’s transformation into a more focused platform dedicated to employee wellbeing and benefits. William P. Foley, II, Chair of the Board, echoed these sentiments, stating that the transaction unlocks potential for Alight to drive sustainable, profitable growth and shareholder value.
Alight plans to reveal its historic pro forma results for the continuing business on July 18, 2024, followed by a webcast discussing the transaction’s closure.
Strada emerges from the sale as an independent entity, continuing to offer comprehensive human capital management and payroll technology and services globally. It boasts over 8,000 employees and delivers mission-critical solutions to enterprise clients in 185 countries.
The press release also contained forward-looking statements regarding the expected benefits of the sale, including financial objectives and anticipated future performance. However, the company cautioned that these statements are subject to risks and uncertainties, which could cause actual results to differ materially.
This news article is based on a press release statement from Alight, Inc.
In other recent news, Alight Solutions has been actively making strategic moves. The company has entered into an accelerated share repurchase agreement with Barclays Bank PLC to buy back $75 million of its common stock, a decision that underscores its confidence in its business performance.
Simultaneously, Alight’s first-quarter results fell slightly short of revenue and earnings expectations, prompting financial services firm DA Davidson to lower its price target for the company from $14.00 to $12.00, while maintaining a Buy recommendation.
In addition to these developments, Alight is planning a divestiture, which has led the company to focus on its mid-term outlook rather than reaffirming its previous guidance for 2024. This outlook anticipates an annual revenue growth of 4%-6%, with an increase in adjusted EBITDA margins to 28%, and a net leverage ratio staying below 3.0 times.
Moreover, Alight has announced major leadership changes, including the appointment of Jeremy Heaton as CFO and Greg Goff as President. The company has also reported a 22% increase in high-growth BPaaS revenue and expects to see a stronger performance in the second half of 2024, coinciding with the completion of its cloud migration. These recent developments highlight Alight’s strategic focus on growth and profitability, even as it navigates a period of significant change.
InvestingPro Insights
Following the strategic divestiture of its Payroll & Professional Services business, Alight, Inc. (NYSE: ALIT) stands poised to reshape its financial structure and market positioning. The transaction is set to bolster Alight’s focus on its core offerings, potentially leading to a more streamlined and efficient operation.
An analysis of recent data from InvestingPro shows Alight with a market capitalization of approximately $3.96 billion. This valuation comes at a time when the company’s net income is expected to grow this year, according to an InvestingPro Tip. Moreover, Alight’s liquid assets have been reported to exceed short-term obligations, indicating a solid liquidity position which could be reassuring to investors considering the company’s transformation.
Despite not having turned a profit over the last twelve months, analysts are optimistic, predicting profitability for Alight within the year, as per another InvestingPro Tip. However, it’s worth noting that the company is trading at a high EBIT valuation multiple and does not pay a dividend to shareholders, which might be a consideration for income-focused investors.
InvestingPro Data further reveals a revenue growth of 13.03% for the last twelve months as of Q1 2024, although the most recent quarterly comparison shows a slight decline of 4.61%. The gross profit margin remains strong at 36.09%, with an operating income margin of 1.39%, underscoring the efficiency of Alight’s operations despite the broader financial picture.
Investors and potential shareholders can find additional insights and metrics on Alight, including a total of 7 InvestingPro Tips, by visiting InvestingPro’s dedicated company page. Moreover, those interested in a deeper dive into the company’s financials can benefit from a special offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Stock Markets
Palantir, Anduril join forces with tech groups to bid for Pentagon contracts, FT reports
(Reuters) – Data analytics firm Palantir Technologies (NASDAQ:) and defense tech company Anduril Industries are in talks with about a dozen competitors to form a consortium that will jointly bid for U.S. government work, the Financial Times reported on Sunday.
The consortium, which could announce agreements with other tech groups as early as January, is expected to include SpaceX, OpenAI, autonomous shipbuilder Saronic and artificial intelligence data group Scale AI, the newspaper said, citing several people with knowledge of the matter.
“We are working together to provide a new generation of defence contractors,” a person involved in developing the group told the newspaper.
The consortium will bring together the heft of some of Silicon Valley’s most valuable companies and will leverage their products to provide a more efficient way of supplying the U.S. government with cutting-edge defence and weapons capabilities, the newspaper added.
Palantir, Anduril, OpenAI, Scale AI and Saronic did not immediately respond to a Reuters request for comment. SpaceX could not be immediately reached for a comment.
Reuters reported earlier this month that President-elect Donald Trump’s planned U.S. government efficiency drive involving Elon Musk could lead to more joint projects between big defense contractors and smaller tech firms in areas such as artificial intelligence, drones and uncrewed submarines.
Musk, who was named as a co-leader of a government efficiency initiative in the incoming government, has indicated that Pentagon spending and priorities will be a target of the efficiency push, spreading anxiety at defense heavyweights such as Boeing (NYSE:) , Northrop Grumman (NYSE:) , Lockheed Martin (NYSE:) and General Dynamics (NYSE:) .
Musk and many small defense tech firms have been aligned in criticizing legacy defense programs like Lockheed Martin’s F-35 fighter jet while calling for mass production of cheaper AI-powered drones, missiles and submarines.
Such views have given major defense contractors more incentive to partner with emerging defense technology players in these areas.
Stock Markets
Weakened Iran could pursue nuclear weapon, White House’s Sullivan says
By Simon Lewis (JO:)
(Reuters) -The Biden administration is concerned that a weakened Iran could build a nuclear weapon, White House National Security Adviser Jake Sullivan said on Sunday, adding that he was briefing President-elect Donald Trump’s team on the risk.
Iran has suffered setbacks to its regional influence after Israel’s assaults on its allies, Palestinian Hamas and Lebanon’s Hezbollah, followed by the fall of Iran-aligned Syrian President Bashar al-Assad.
Israeli strikes on Iranian facilities, including missile factories and air defenses, have reduced Tehran’s conventional military capabilities, Sullivan told CNN.
“It’s no wonder there are voices (in Iran) saying, ‘Hey, maybe we need to go for a nuclear weapon right now … Maybe we have to revisit our nuclear doctrine’,” Sullivan said.
Iran says its nuclear program is peaceful, but it has expanded uranium enrichment since Trump, in his 2017-2021 presidential term, pulled out of a deal between Tehran and world powers that put restrictions on Iran’s nuclear activity in exchange for sanctions relief.
Sullivan said that there was a risk that Iran might abandon its promise not to build nuclear weapons.
“It’s a risk we are trying to be vigilant about now. It’s a risk that I’m personally briefing the incoming team on,” Sullivan said, adding that he had also consulted with U.S. ally Israel.
Trump, who takes office on Jan. 20, could return to his hardline Iran policy by stepping up sanctions on Iran’s oil industry.
Sullivan said Trump would have an opportunity to pursue diplomacy with Tehran, given Iran’s “weakened state.”
“Maybe he can come around this time, with the situation Iran finds itself in, and actually deliver a nuclear deal that curbs Iran’s nuclear ambitions for the long term,” he said.
Stock Markets
Ukraine says Russian general deliberately targeted Reuters staff in August missile strike
(Reuters) -Ukraine’s security service has named a Russian general it suspects of ordering a missile strike on a hotel in eastern Ukraine in August and said he acted “with the motive of deliberately killing employees of” Reuters.
The Security Service of Ukraine (SBU) said in a statement on Friday that Colonel General Alexei Kim, a deputy chief of Russia’s General Staff, approved the strike that killed Reuters safety adviser Ryan Evans and wounded two of the agency’s journalists on Aug. 24.
In a statement posted on Telegram messenger the SBU said it was notifying Kim in absentia that he was an official suspect in its investigation into the strike on the Sapphire Hotel in Kramatorsk, a step in Ukrainian criminal proceedings that can later lead to charges.
In a separate, 15-page notice of suspicion, in which the SBU set out findings from its investigation, the agency said that the decision to fire the missile was made “with the motive of deliberately killing employees of the international news agency Reuters who were engaged in journalistic activities in Ukraine”.
The document, which was published on the website of the General Prosecutor’s Office on Friday, said that Kim had received intelligence that Reuters staff were staying in Kramatorsk. It added that Kim would have been “fully aware that the individuals were civilians and not participating in the armed conflict”.
The Russian defence ministry did not respond to a request for comment on the SBU’s findings and has not replied to previous questions about the attack. The Kremlin also did not respond to a request for comment. Kim did not reply to messages sent by Reuters to his mobile telephone seeking comment about the SBU’s statement and whether the strike deliberately targeted Reuters staff.
The SBU did not provide evidence to support its claims, nor say why Russia targeted Reuters. In response to questions from the news agency, the security agency declined to provide further details, saying its criminal investigation was still under way and it was therefore not able to disclose such information.
Reuters has not independently confirmed any of the SBU’s claims.
Reuters said on Friday: “We note the news today from the Ukrainian security services regarding the missile attack on August 24, 2024, on the Sapphire Hotel in Kramatorsk, a civilian target more than 20 km from Russian-occupied territory.”
“The strike had devastating consequences, killing our safety adviser, Ryan Evans, and injuring members of our editorial team. We continue to seek more information about the attack. It is critically important for journalists to be able to report freely and safely,” the statement said.
Reuters declined to comment further on the allegation that its staff were deliberately targeted.
The SBU statement said Kim had been named a suspect under two articles of the Ukrainian criminal code: waging an aggressive war and violating the laws and customs of war.
“It was Kim who signed the directive and gave the combat order to fire on the hotel, where only civilians were staying,” it said.
Evans, a 38-year-old former British soldier who had worked as a safety adviser for Reuters since 2022, was killed instantly in the strike.
The SBU statement gave some details about how the strike had occurred, according to its investigation.
“To carry out the attack, the Russian colonel general involved one of his subordinate missile forces units,” the Ukrainian agency said, adding that the strike was carried out with an Iskander-M ballistic missile.
The SBU did not identify the specific unit.
Ivan Lyubysh-Kirdey, a videographer for the news agency who was in a room across the corridor, was seriously wounded. Kyiv-based text correspondent Dan Peleschuk was also injured.
The remaining three members of the Reuters team escaped with minor cuts and scratches.
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