Electronic Data Systems Corp announced yesterday that it had found the target of its long-held acquisition desires in Turin, Italy-based Gruppo Systems & Management SpA, in which it has bought a 67% stake. Vice-president Robert McCashin told a meeting of the Paris club of technical journalists that EDS has also the option to and intention […]
Electronic Data Systems Corp announced yesterday that it had found the target of its long-held acquisition desires in Turin, Italy-based Gruppo Systems & Management SpA, in which it has bought a 67% stake. Vice-president Robert McCashin told a meeting of the Paris club of technical journalists that EDS has also the option to and intention of acquiring the rest of the equity, but declined to reveal terms of the acquisition. Gruppo S&M handles custom applications software, with a strong capability in consulting, a range of products and some important government contracts, McCashin said. Established in 1978, the company now employs approximately 600 people and registered 1992 revenues of $56.5m, of which over half come from the finance industry. McCashin contends that Gruppo S&M is a company very much like EDS. There are lots of opportunities in Italy and few players. We see lots of room for our expertise because computers in Italy are not terribly productive today, he said. Nonetheless, the Italian data processing services market is Europe’s fourth largest, totalling approximately $38,000m, he added. The acquisition of Gruppo S&M, which IDC Italia rates as Italy’s tenth-largest services company, is part of the General Motors Corp’s continuing efforts to fatten its business in Europe. Europe still represents a largely untapped market for EDS, but we won’t be chasing after every contract, because that does no one any good, not us and not our customers. We will selectively go after contracts where we know we can add value and expertise, McCashin said. He said he expects EDS’s European revenues, which totaled $1,400m in 1992, to grow more quickly this year than the rest of the world. By the end of the decade, we would like it to be the same size as our business in the US, he said. In France, since the departure of EDS France managing director Jacques Tordjman, McCashin said the company has been reorganised into industrial sectors. He said he does not see large acquisitions as the way to grow its business in France. If there are strategic reasons for an acquisition, such as a product or a market we want to enter, fine. But acquisitions just to grow the revenue is not our goal, he said. McCashin said he is still a month or two away from appointing a replacement for Tordjman. I was not so interested in getting someone who was looking for job as I was someone who was successful and trying to convince them to leave, he said.