Lynx keeps lid on Sphinx spin-off talk

Distributor and services group Lynx is staying tight-lipped about a possible spin-off of its Sphinx CST reseller division, following a major restructuring.

Distributor and services group Lynx is staying tight-lipped about a possible spin-off of its Sphinx CST reseller division, following a major restructuring.

In a statement, the company announced that the Lynx board had completed a review in July, which "strongly reaffirmed its determination that Lynx should be a focused software and services group specialising in the financial services sector".

Richard Last, chief executive, was unavailable for comment, but a Lynx representative told CRN that the group has for some time been planning to sell parts of the business seen as "non-core".

The company's Sage and SAP commercial systems division is to be de-merged for £50m into a separate listed company, which will trade as Ascent. The group's automated software arm is also up for sale.

Lynx is currently reeling from the discovery of a £5m error on Sphinx's accounts which led to the resignation of financial director Grahame Benson.

"It was purely a human error accounting mistake by the finance director and is totally unrelated to the rest of the restructuring plans," the representative said. On the Sphinx spin-off, the representative refused to elaborate further. The reseller is seen as one of the 'non-core' businesses.

The representative said: "We cannot be more specific at this time, but the possibility of a flotation or de-merger or even a joint venture is not being ruled out."

However, despite the company's policy to focus away from the reseller side, he admitted that Sphinx is a significant contributor to Lynx's turnover and value for shareholders. "Sphinx still remains an extremely good business in its own right," he said. Lynx was not going to "dump the company for the sake of it", he added.

Industry observers saw the move as positive. A source told CRN: "Lynx is still a very profitable business, despite its present financial setbacks. The group has taken an accounting hit which will have an initial adverse impact, but on the whole, the core of the business is solid.

"Lynx has nothing to worry about, because the businesses up for sale are profitable and will be viewed with a lot of interest by potential buyers."