BTG reduces stake in GTSI
- By Margret Johnston
- Feb 10, 1999
BTG Inc. and Government Technology Services Inc. have signed agreements that reduce BTG's ownership in GTSI and transfer the responsibility of government contracts fully to GTSI, including warranty service responsibility.
The agreements, announced yesterday, call for BTG to transfer to GTSI $800,000 in cash and 200,000 shares of GTSI that it has held in escrow and to sell 400,000 shares of GTSI back to the Fairfax, Va.-based company at $5 a share. BTG also granted GTSI an option to buy the remaining 1.3 million shares of GTSI stock that it owns—13.3 percent of the company—at $5.25 per share.
BTG announced the sale of its reseller division to GTSI in December 1997. That deal, sealed in February 1998, left BTG with a 30 percent stake in GTSI. Since then, BTG has shifted its focus almost entirely to services and has decided to sell most of its stake in GTSI, a BTG spokeswoman said.
BTG also is selling its Pentagon retail operation, which it used to demonstrate products.
BTG will record a one-time after-tax charge of $1.6 million as a result of the agreements. BTG expects the charge to be offset by a gain in the fourth quarter from the sale of 41,000 shares of Cisco Systems Inc. BTG also said its president and chief executive officer, Ed Bersoff, has resigned from GTSI's board of directors.