STAMFORD, Conn.–(BUSINESS WIRE)–Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, said today it has sold its automation unit to UST, a leading digital transformation solutions company, for $27 million in an all-cash transaction, with a portion of the proceeds placed in escrow, to be released contingent upon meeting certain conditions.
The unit offers robotic process automation (RPA) software implementation and licensing services. It was established as a startup business in 2017 to meet the emerging demand for RPA.
ISG Chairman and CEO Michael P. Connors said the sale is a “win-win” for both ISG and UST.
“With this sale, ISG emerges as a stronger, more focused firm, devoted to serving our clients by leveraging our towering strengths in sourcing, powered by our AI-driven ISG Tango™ platform; digital transformation, including enterprise change and training-as-a-service; AI advisory, technology research and supplier governance,” Connors said. “In addition, the cash proceeds of the sale immediately strengthen our balance sheet and improve shareholder value.
“At the same time, our former automation unit will benefit from being part of a larger technology services organization in UST, one that we have known and respected for years, with the resources and scale to compete in the intelligent automation space,” Connors said.
Commenting on UST’s acquisition, Sajesh Gopinath, general manager and go-to-market leader, UST SmartOps, said: “This strategic investment in the intelligent automation space solidifies UST’s position as a market leader in a dynamic sector that has the potential to transform industries, enhance productivity, improve customer experiences, and generate new revenue streams. By onboarding experienced intelligent automation consultants and capabilities, UST is strengthening its standing in a competitive market and broadening its partner ecosystem to position itself for future growth and meet the emerging needs of our clients.”
Connors said ISG decided to exit the business because its implementation and software licensing activities no longer were a strategic fit with ISG’s position as an independent, third-party advisory firm.
ISG received $20 million in cash at closing with the remaining $7 million held in escrow. Of this amount, $4 million is to be released from escrow over the next 90 days as certain contractual conditions with clients are met, and the remaining $3 million is to be released after the end of the first quarter of 2025, based on the achievement of certain revenue targets. Net proceeds from the transaction are expected to provide the opportunity to reduce debt and return capital to shareholders.
To reflect the impact of the divestiture activity, ISG said it is updating its third-quarter guidance, targeting revenues in the range of $60 million to $61 million, and adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) in the range of $6.5 million to $7.0 million.
Sett & Lucas served as financial advisor to ISG, and Katten Muchin Rosenman LLP served as legal advisor.
ISG will file a Form 8-K with the Securities and Exchange Commission in connection with the sale.
About UST
Since 1999, UST has worked side by side with the world’s best companies to make a powerful impact through transformation. Powered by technology, inspired by people, and led by our purpose, we partner with our clients from design to operation. Our digital solutions, proprietary platforms, engineering expertise, and innovation ecosystem turn core challenges into impactful, disruptive solutions. With deep industry knowledge and a future-ready mindset, we infuse innovation and agility into our clients’ organizations—delivering measurable value and positive lasting change for them, their customers, and communities around the world. Together, with 30,000+ employees in 30+ countries, we build for boundless impact—touching billions of lives in the process. Visit us at www.UST.com.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.
