Electronic Data Systems Corp is very close to acquiring an Italian software and information services company with revenues in excess of $100m, said Robert McCashin, corporate vice-president and director for EDS Southern Europe, in an interview. The aim is to expand its business in Italy this year four- or five-fold, he said. Through one acquisition […]
Electronic Data Systems Corp is very close to acquiring an Italian software and information services company with revenues in excess of $100m, said Robert McCashin, corporate vice-president and director for EDS Southern Europe, in an interview. The aim is to expand its business in Italy this year four- or five-fold, he said. Through one acquisition or a combination of acquisitions, I would like to be in excess of $100m in revenue in Italy when we go into next year, but that will only happen if we find the right match. The company we are very close with is in excess of $100m, McCashin said. But we are looking at others too; there are lots of candidates out there and we need to conclude something this year. Although no exact figures on EDS’ Italian revenues in 1992 were available, an EDS spokesman estimated them to be $20m, most of which are General Motors Corp-related. While Finsiel SpA, Italy’s leading software and services company whose business depends heavily on the Italian government, is much larger than $100m, it could be a candidate, McCashin acknowledged. If the government is going more and more toward privatisation, [acquiring Finsiel] shouldn’t be a problem, he noted. Finsiel reported 1991 revenues of $1,020m. McCashin, who is relocating to Europe as part of last November’s corporate reorganisation that placed three vice-presidents in charge of European operations, says he is authorised to spend up to $10m without consulting the company’s finance committee. 1993 could hold several acquisitions for EDS Europe, as Jacques Tordjman, president of EDS-GFI, EDS’s French subsidiary, said yesterday that EDS-GFI intends to relaunch its acquisitions activity in France this year. It wants to be among the top three software-systems integration houses in France by the end of 1994, where it is among the top five today, Tordjman said. In reporting EDS-GFI’s 1992 revenues of $342m, 25% of EDS’s European business of $1,370m, Tordjman indicated the company is particularly interested in acquiring telecommunications expertise. Our clients are asking more and more for us to integrate their telecommunications infrastructure into their information systems, he noted.
Within the next five years, Tordjman said, EDS wants its European revenue to comprise one third of its total. He said the French subsidiary was profitable but declined to give a figure. It’s not yet up to the standard of EDS, of 12% (of revenue) pre-tax, but we aim to get there within the next few years. For 1993, I think we will be able to increase net profit by three or four points, Tordjman said. EDS-GFI’s revenue was up 7.7%. He expects to sign a facilities management contract within a few weeks that is bigger than the $53m seven-year contract it signed with Mory-TNTE in December. In total, EDS-GFI signed $150m of facilities contracts in 1992. Facilities management contracts in France are beginning to become contracts in which the client decides to hand over the complete information system, he noted. EDS/GFI’s 1992 revenues derived 51% from facilities and systems management, up 7%, 32% from engineering and systems integration, up 6%, and 17% from software products, up 14%. Tordjman expects software products to grow faster this year than engineering and systems integration, but he would like to maintain the same division of revenue for the next few years. By industrial sector, EDS/GFI earns most of its revenue from manufacturing (39%), followed by distribution (23%), banking and finance (21%), energy (10%) and public administration (7%). While EDS/GFI boasts expertise in six different hardware environments – IBM Corp, Digital Equipment Corp, Hewlett-Packard Co, Compagnie des Machines Bull SA, Unisys Corp and Tandem Computers Inc, 58% of its revenue comes from contracts involving IBM systems. Tordjman noted that 9% of business came from IBM AS/400 systems, up from nothing only a couple of years ago. Work on Bull kit comprised 23% of revenues, followed by 10% for DEC-HP-Unisys-Tandem systems, 9% for open systems – heterogeneous,