GE offloads failing ecommerce unit for bumper profit

Bargain...

General Electric has sold off its failing ecommerce division GXS, which helps companies trade with each other online, to technology buyout fund Francisco Partners for $800m. GE said it would make a pre-tax gain of $500m on the sale of GE Global eXchange Services (GXS) and will continue to hold a 10 per cent stake in the business. Nigel Montgomery, director of European research at AMR Research, said: "I'm not overly surprised that GE has sold GXS. The technology GXS uses has been around for ages but it hasn't taken off." Francisco Partners intends to revamp the software and services company through the acquisition of similar businesses and employing more technology professionals. Montgomery added: "This deal is a good thing for GXS as it was never leveraged within GE as it should have been." GXS reported first quarter profits of $5m which is 84 per cent lower than the same period last year, on turnover of $105m, down 38 per cent from the same period in 2001. GE said that it wishes to concentrate its business on technology related to jet engines, power turbines and medical devices and GXS does not fit in with that.