Technology buyout fund Francisco Partners is acquiring General Electric’s B2B
e-commerce company, GE Global eXchange Services (GXS), in a deal valued at
$800 million as GE turns its focus toward its core businesses.
Fairfield, Conn.-based GE said it will retain a 10 percent
stake in the business, and Global eXchange CEO Harvey Seegers will stay
with the e-commerce company, which operates an e-commerce network with more
than 100,000 trading partners.
Menlo Park, Calif.-based Francisco Partners, with $2.5
billion in capital, specializes in buyout and recapitalization investments in
technology companies.
“…GXS does not fit GE’s core services and growth strategies,” said Gary
Reiner, senior vice president and chief information officer at General
Electric. GE said it would likely post a pretax gain of about $500 million
from the transaction.
Seegers has said the business is profitable, but he couldn’t provide specific
figures.
He was quoted as saying that Global eXchange will continue to focus more on
open-standards systems, in lieu of the proprietary technologies that formed
the basis of the operation a few years ago.
GE’s timing was off on its investment in e-commerce services. At a time in
early 2000 when the Internet recession was just beginning, GE decided to put
hundreds of millions of dollars in its Information Systems business and
re-engineer it as a provider of e-commerce services.
Francisco said it plans to help Global eXchange acquire other electronic
commerce companies and hire more technology professionals.
