The abnormally warm winter of 2002 isn’t thawing the icy shoulder Progress Energy has turned toward some of its diversified holdings, and company officials are hoping that the decision to walk away from $150 million in investments will warm the company’s coffers.
On Monday, Progress announced it has sold its Cary-based Strategic Resource Solutions Software Technologies division to TMA Systems, a Tulsa, Okla.-based provider of facilities maintenance software and services for more than 1,000 industrial, commercial and institutional customers. Details of the transaction were not disclosed.
Progress Energy spokesman Keith Poston declined to answer questions regarding the future of SRS’ technology division, and referred all inquiries to TMA. That company did not return telephone calls on Monday. The fate of the division’s 43 workers is unknown.
TMA plans to rename the broken out division ACT Systems. It is also unclear how much of the unit, which develops software that helps educational institutions and other entities manage and scrutinize how much they are spending on energy, will remain in the Triangle.
What is known through an examination of Progress’ 2001 annual report is that SRS, combined with two other Progress holdings, lost $15 million last year. The utility took a one-time charge of $45.6 million. Progress purchased SRS in 1994 when the Raleigh-based utility was still known as CP&L.
The company still plans to sell SRS Enterprise Automation, a 212-employee division that physically places energy monitors and controls on institutional and commercial power plants.
Progress intends to hold its investment in another piece of the software company, SRS Energy Services, a 50-employee energy consulting division for government and commercial customers, for the foreseeable future. Progress does not break out earnings or specifics regarding that division.
The sale of SRS’ technology division is the first in what could be a fire sale for the Fortune 500 company. Progress also has plans to sell its interest in Morrisville-based application services provider Interpath, a company that has faced an uphill battle almost since it was acquired from Capitol Broadcasting Corp. in 1994 for $150 million.
Progress officials estimate that the company’s initial investment is now worth a fraction of what it was eight years ago. Progress took a hands-on approach to Interpath before refinancing the application service provider (ASP) with New York-based investment firm Bain Capital in 2000.
CaroNet, a small telecom and another holding of Progress, is also up for sale, but company officials declined to reveal if they have received any interest from potential buyers.
Progress, which has 2.9 million customers throughout Florida and the Carolinas, reported that it generated $97.9 million in profits during fourth quarter 2001 despite the write-offs. Revenue for the fourth quarter was $1.9 billion, up from $1.26 billion the year before, and annual revenues more than doubled from $4.1 billion in 2000 to $8.5 billion last year. But company officials warn that comparing fourth quarter statements between 2000 and 2001 will result in misleading figures because Progress’ $5.3 billion purchase of Florida Progress wasn’t finalized until Nov. 30, 2000.
