Lucent Sells Off Part Of Sales Force - InformationWeek

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Lucent Sells Off Part Of Sales Force

Lucent Technologies yesterday expanded its opportunities inthe small and midsize business market. The communicationscompany sold the part of its U.S. sales force that focuseson the smaller market to an investment firm that will createan independent sales and integration company. Terms of thedeal were not disclosed, but the newly formed company willhave a revenue base of $850 million.

The buyer, Mandl Bessemer Holdings L.P., will create acompany that will resell Lucent's systems, data equipment,and communications services, including Internet and longdistance, exclusively to businesses with less than 250employees. Lucent will still offer service and support tothose buyers. The division's 2,000 will move to the startup.The move lets Lucent sell its products to the small andmidsize market--which the company says prefers to purchaseproducts through an indirect channel--while not employing asales force specifically focused on that market. Lucent willcontinue to use its direct sales force and Web-based salesmodel for larger and multinational companies.

The sale came on the same day the company reported that ithad more than doubled its net income and increased itsrevenue by $2 billion in its second fiscal quarter, endedMarch 31. Revenue for the period was $8.2 billion, comparedwith $6.2 billion for the same period last year. Net incomebefore charges was $457 million, or 17 cents per share,versus pre-charge net income of $186 million, or 7 cents pershare, year over year. The company attributes its success tothe surge in demand for network capacity, broadbandnetworks, and advanced semiconductors. Lucent anticipates a20% increase in revenue for 1999. Lucent closed up 2-5/8 to61-3/4 following both announcements.

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