Basman | Explore: IT Outsourcing

Ken Dahlberg, SAIC’s CEO, rang the opening bell at the NYSE.

Deal or no deal?

“When I see an expensive deal, and they say it was a ’strategic’ deal,” says Craig Tall, vice chair of corporate development at the diversified financial services firm Washington Mutual Inc., “it’s a code for me that somebody paid too much.”

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Focus on S&T Core Industries in Central and Eastern Europe  

S&T System Integration & Technology Distribution AG has announced the sale of EFP Consulting AG Switzerland. This move is in keeping with S&T’s stated intention to focus more strongly on the core S&T industries, financial services, power utilities, the manufacturing industry and telecommunications companies in the CEE countries.

EFP Consulting AG Switzerland was taken over by S&T in 2005 as part of the acquisition of the EFP Group. The Swiss subsidiary focused primarily on customers who operate in Switzerland and on the SAP licence business. The sale is therefore due to S&T’s decision to focus more strongly on its core industries as well as on providing SAP / ERP consulting services for customers in Central and Eastern Europe.

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Now, this is really hot. Red Herring writes:

Investment from chip maker is latest VC-backed Chinese software consulting deal. Intel Capital said Tuesday it has invested $40 million in the Chinese IT outsourcing firm Neusoft, the largest investment to date from its $200-million IntelCapital China Technology Fund.

The investing arm of chip giant Intel and Shenyang-based Neusoft, one of China’s largest software outsourcing service providers, also struck a deal under which Neusoft will establish a software competency center for its customers using Intel’s products.

Intel will also work with Neusoft to develop software products and interactive university education and certification training program for the Chinese market, again using Intel products. Software training will be offered in areas such as manufacturing, medical equipment, and home appliances.

Neusoft, which has a staff over 10,000, has divisions for software and services, medical systems, and IT education and training. The company claims more than 8,000 corporate customers. It has software parks in Shenyang, Dalian, Chengdu, and Nanhai, China, as well as branches in the United States and Japan.

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The clearance and bargain sales at the giant IT service provider Getronics (NL) continues. After selling off the subsidiaries in East Europe and the HR unit of ex-Pink Rochade now the next step in order to cash and consolidate finances:
 
Getronics, announced today the management buy-out of KZA, a 100% owned subsidiary of Getronics in the Netherlands. Following the buy-out, KZA will continue to provide a complete range of services to its clients as a fully independent business. Getronics has signed a letter of intent with Strikwerda Investments BV, who are financing the buy-out. The agreed purchase price is EUR 21 million. The turnover of KZA in 2005 was approximately EUR 17 million. There are 170 employees presently working for KZA. 
 
KZA has become a leading institute for ICT-related consultancy. Following a strategic reorientation of the management of KZA within Getronics, it was decided to offer the management the opportunity to grow the business further as an independent enterprise. Getronics and KZA will continue to work together as partners.

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Getronics keeps full access to its €284 million in Syndicated Credit Facilities until maturity in March 2008. This means that the earlier announced decrease with €30 million has been cancelled by its lending banks. Getronics is pleased to announce it has been able to reach an agreement with its banking syndicate on the following amendment to its 2005 Syndicated Revolving Credit Facilities: 

• Following the announced sale of HRS, the Company has regained full lending commitment from its banks, without any further stipulation on other transactions.
• As a result of this the earlier announced decrease with €30 million of the Syndicated Revolving Credit Facilities on 30 September 2006 has been cancelled.

This means that Getronics keeps full access to the Syndicated Credit Facilities of €284 million in total until maturity in March 2008, consisting of €225 million Revolving Credit Facilities and a Term Loan Facility of €59 million for acquisition purposes. Its Banking Syndicate consists of ABN AMRO, Rabobank, ING Bank, SNS Bank and NIBC.

Comments by CEO Klaas Wagenaar: “I am very happy with this agreement as it is a clear vote of confidence from our banking syndicate, which allows us - after the sale of Italy and HRS - to fund our normal working capital needs going forward”.