Unisys Corporation (NYSE: UIS) has announced a deal to sell its US federal IT contracting business to SAIC, and a consolidation of its Enterprise Solutions United States & Canada (US&C) and Latin America regions into a new Americas region.
Mike Morrison, who has been with the company since 2015 serving as vice president and general manager for Enterprise Solutions US&C (US & Canada) , has assumed leadership responsibility for Enterprise Solutions Latin America after former Latin America head Eduardo Almeida left the company late last year. Mauricio Cataneo, who has been with the company since 2006 as vice president and Chief Financial Officer (CFO) for Latin America, has taken on the additional role of general manager of Unisys in Brazil, which accounts for the largest Unisys operation in Latin America and is among the three largest company markets worldwide.
“This move creates a $1 billion revenue region between US&C, and Latin America that is both scalable with great brands and features numerous strong relationships,” said Morrison. “The new regional alignment is designed to create synergies between projects developed in both regions, as well as achieve gains in scale and better use of resources in order to achieve the company’s long-term growth goals.”
The Pennsylvania based IT services provider has been struggling on several fronts. Its Latin America & Caribbean revenues fell 17% last year, while the US government business being sold to SAIC grew by 27% in 2019. Last week, the company reported a 2019 net loss of $17.2 million USD.
“This cross-regional consolidation will be very beneficial in terms of process simplification, resource optimization and the sharing of best practices,” said Cataneo. “It will increase our competitiveness in Brazil and throughout Latin America, allowing us to focus on those key markets where we see greater business opportunities and plan to intensify our presence.”
Unisys earlier in February announced that it was selling its US federal government contracting business to Science Applications International Corp. (SAIC) for $1.2 billion USD. The company’s weak balance sheet has prevented it from bidding or participating in several larger, complex government IT contracts.
Unisys also faces an unfunded pension deficit of $1.7 billion USD. CEO Peter Altabef says that proceeds from the sale of the government unit will go towards funding this pension deficit and shoring up the firm’s balance sheet. Paying down debt and pension obligations “really moves us from a company that had some challenges in its capital structure to a company that is frankly now advantaged in its capital structure,” Altabef said.