Sword Group, a provider of business applications to the world’s largest companies, has disposed of a 77.5 per cent stake in its Scottish services operation to its management for an initial £27.8 million in cash. 

Sword Group, a provider of business applications to the world’s largest companies, has disposed of a 77.5 per cent stake in its Scottish services operation to its management for an initial £27.8 million in cash.

The newly created Amor Group, which consists of the existing management team backed by Close Growth Capital, Clydesdale Bank and Scottish Enterprise, will pay an initial £19 million after outstanding loans and transaction costs have been deducted. Sword will continue to have a stake in the business, albeit smaller, with an £8 million investment in the new group.

The deal marks Sword’s transition to a focused software business and is in line with its strategy of generating 80 per cent of its revenue through software by 2010. Software services will now account for more than 60 per cent of the company’s annual revenue. The company said disposal of the Scottish services operations will increase the group’s profitability and the proceeds will be used to invest in research and product development.

Jacques Mottard, executive chairman of Sword Group, said: “This is a significant step for us as a group in the crystallisation of our long-term business strategy to build a world-class portfolio of software products and solutions.

“The revenue from the sale enables us to further strengthen our offerings through our software build-out strategy. Key to this is our ongoing investment in research, development and delivery models, as well as the addition of new strategic partners to enhance our offerings and accelerate time to market.”

NYSE-traded Sword Group has operations in 37 countries and employs more than 2,000 people, generating over €200 million (£178 million) in revenue.