Convergys Announces That the Sale of Its Minority Interests in the Cellular Partnerships to AT&T Has Closed

Convergys Corporation CVG announced today that the sale of its interests in the cellular partnerships in the Cincinnati metropolitan area to AT&T for approximately $320 million in cash has closed. Convergys expects to announce second-quarter results in early August and will update full-year guidance to reflect cellular partnership-related impacts on EBITDA, EPS, and free cash flow. The two companies announced the definitive sale agreement on June 2, 2011. The equity earnings and cash distribution from the cellular partnerships in the first quarter of 2011 were both $10 million. Under terms of the purchase agreement, Convergys will receive its share of the cash distribution for the second quarter performance, if any. Convergys expects net after-tax cash proceeds from the sale to be approximately $250 million, or $2 per diluted share. “This transaction simplifies our corporate structure, increases our financial flexibility, and provides investors better visibility into our recurring earnings stream from our operating units,” said Jeff Fox, president and CEO of Convergys. As a result of its spin-off from Cincinnati Bell Inc. CBB in 1998, Convergys received a 34% limited partnership interest in Cincinnati SMSA and a 45% limited partnership interest in Cincinnati SMSA Tower Holdings. Together, these two properties are referred to as the "cellular partnerships."