Information Services Group (III) M&A Announcement summary

Deal rationale and strategic fit

• Divested the automation unit to focus on core areas: sourcing, digital transformation (including AI), technology research, and governance and compliance.

• The automation unit's RPA implementation and licensing activities were not aligned with the firm's independent advisory positioning.

• The sale was planned from the outset, with the unit structured for easy separation and monetization.

• UST aims to strengthen its market leadership in intelligent automation and expand its partner ecosystem.

Financial terms and conditions

• Sold the robotic process automation unit to UST for $27 million in an all-cash deal.

• $20 million was paid at closing; $7 million is held in escrow, with $4 million to be released within 90 days and $3 million after Q1 2025, contingent on revenue targets.

• No gain expected for tax purposes; a loss is anticipated, though the amount is still being determined.

• Proceeds will be used to reduce debt, reinvest in the business, and return capital to shareholders.

Synergies and expected cost savings

• About 110-120 employees will transfer with the sale, reducing headcount.

• SG&A will decrease as sales capacity and other automation group functions move to UST, partially offset by transition service costs for at least 90 days.

• UST expects to enhance productivity, improve customer experiences, and generate new revenue streams through the integration.