Viridian intends to return almost £100 million (€145 million) to its shareholders following the disposal of its IT business, Sx3, in a major cash deal.

Sx3 was set up eight years ago by Viridian as a software and IT services company, primarily focused on the public sector in Britain. However, Viridian is now concentrating on its core business of electricity generation and supply.

The overall value of the sale is £155 million, all in cash. The company said yesterday that about £25 million of this amount would be used to address the company's pension deficit, and about £30 million to reduce debt.

The remainder is likely to go back to shareholders. The company buying the business is UK firm Northgate Information Solutions.

Sx3 reported operating profit before amortisation of goodwill of £7.1 million for the year ended March 31st, 2004 and pretax profits of £6.4 million.

Operating profit before amortisation of goodwill for the six months ended September 30th, 2004, was £4.8 million, compared with £1.5 million for the corresponding period in 2003/04.

Analysts yesterday speculated on the method likely to be used to return value to shareholders.

"It is likely to be in the form of a special dividend and/or share scheme, the final format is expected by completion date," said Davy analyst Jack Gorman.

The purchase price for Sx3 was well ahead of expectations, with most Dublin analysts expecting a sum of about £60 million. John Sheehan, an analyst with NCB, said the deal was a good one.

"Strategically, the sale of Sx3 looks well-timed and follows Viridian's exit from its financial services and telecoms businesses in recent years. The group will now be firmly focused on its energy activities in Northern Ireland and the Republic."