GERMANY – Embattled German IT company FJH has confirmed it has sold its pensions consulting arm Heubeck back to its founder – who may consider selling a stake.

But Professor Klaus Heubeck says the firm will not remain entirely his in the long term.

“If you consider what is happening to other German pensions advisors like Bode, which just tied up with Hewitt, it’s clear that every player in the business will have to think about repositioning itself,” Heubeck told IPE.
”One possibility is to bring in a strategic investor. But this is all speculation. Right now, I’m preoccupied with finishing the deal with FJH,” he said.

Last week, Bode Grabner Beye, a rival to Heubeck’s firm, formed a joint venture with Hewitt of the US to provider pension and benefits consulting to companies in Germany.

Professor Heubeck stressed that despite FJH’s problems since it bought Heubeck AG in May 2003, his firm’s business remained stable. “Throughout this period, our clients stayed loyal.” Heubeck AG provides pensions consulting to around 1,000 companies in Germany.

Professor Heubeck was speaking to IPE a day after FJH confirmed he had re-taken control of the pensions advisor in a management buyout. The value of the transaction was not disclosed, but FJH said in a statement that because of it, its debt burden would be lowered by €12.7m.

IPE first reported on October 19 last year that FJH was considering selling Heubeck, a profitable unit, to stave off financial ruin. Then on November 12, IPE reported that Professor Heubeck had made a bid to buy back his former company.

Although its full-year results have not yet been published, the Munich-based insurance software firm posted a pre-tax loss of E11.6m as clients cut IT spending. The loss compared with a profit of E12.6m for the first half of 2003. Beyond the loss, FJH’s debt burden totalled €19.2m at the end of September, and around half of that was short-term.

In the statement, FJH said it had no choice to sell Heubeck, as the pensions advisor would have continued to require management and financial resources in the effort to realise synergies.