As suggested briefly yesterday (CI No 1,682), ICL Plc is to take over the activities of Nokia Data, in a deal which values the Finnish systems integrator at UKP330m. At an emergency briefing for the press and ana-lysts in central London yesterday, ICL disclosed that it will pay UKP50m cash and hand over UKP180m preference […]
As suggested briefly yesterday (CI No 1,682), ICL Plc is to take over the activities of Nokia Data, in a deal which values the Finnish systems integrator at UKP330m. At an emergency briefing for the press and ana-lysts in central London yesterday, ICL disclosed that it will pay UKP50m cash and hand over UKP180m preference shares, half of which will be converted into a 5% maximum ordinary shareholding in ICL when the company re-floats on the London Stock Exchange. It will also assume UKP100m of debt. Nokia Data’s assets are valued at around UKP100m. In 1990 the company, which employs 7,000 staff in 10 European countries, turned over $1,200m, down 5% on the previous year – 60% of revenues were generated in Scandinavia, the balance in central Europe. The deal, which is subject to approval by the Finnish government and the European Commission’s Competition Directorate, is scheduled for completion on September 30. Conversion into ordinary shares must be completed within seven years of the completion date; the preference dividend is 8.827% net. One Nokia director will sit on the board on ICL Plc as part of the deal. As usual, Peter Bonfield was quick to point out that the acquisition is being financed completely by ICL Fujitsu Ltd’s only input was to give its approval as 80% shareholder, an approval which was also obtained from minority shareholder Northern Telecom Ltd. Nokia Data, meanwhile, likes to think of the deal as a merger, resulting in an enlarged European company with total revenues of some $4,000m – $3,500m of which will be in Europe – and an overall European staff of 24,000. After a tough year of losses and heavy restructuring in 1990, Nokia Data claims now to be on the road to profitability, on target to be back in the black by the year end. From ICL’s point of view, the deal represents an opportunity to expand its personal computer, local area network and systems integration activities into the vertical markets of Scandinavia and strengthen its position in Germany, France and the Netherlands. Some 90% to 95% of Nokia Data’s sales are made to direct to large corporate customers in the retail, government and finance sectors. Nokia Data, which has moved into open systems with its personal computers and local area network terminals, presents ICL with a perfect opportunity to complete its open systems portfolio. ICL aims to get its Unix systems into Nokia Data’s vertical markets. And Nokia Data has a profitable and growing European service operation which ICL is glad to get its hands on, as part of its strategy of increasing its revenues from software and services. ICL actually began negotiations with Nokia Data back in the summer of 1988, but nothing ever came of them since STC, then in control, did not welcome the intrusion of a third par-ty. Nokia Data, for its part, does not deny that the deal may present opportunities for the company to co-operate directly with Fujitsu – Kalle Isokallio, president and chief operating officer of Nokia, simply said that no complete discussions had taken place. It seems that ICL and Nokia still have things to talk about between now and September, such as the make-up of the new management team, the future of Nokia Data staff, and the nature of future plant and product restructuring. Nokia Data has three small assembly plants – one in Helsinki for personal computers and two in Sweden for terminals, one of which is under closure. What ICL chairman Peter Bonfield did say was that some of its Taiwanese manufacturing will be moved to Europe in the future. ICL expects the acquisition to impact its earnings per share when Scandinavia emerges from its current depression – this will help ICL’s reflotation, which is scheduled to take place as soon as a share price of UKP2.25 is sustainable. When ICL re-floats, Fujitsu’s 80% stake will be diluted – Bonfield points out that this was always the intention – Fujitsu will, however, remain the majority shareholder. Northern Telecom Ltd will also sell at least part of its 20% stake in the company.
It has been agreed that the Noki
a Data name will be retained in Scandinavia for three years, while the ICL badge will be used elsewhere. As for Bull SA, with which Nokia Data was in discussion prior to its recent talks with ICL, this was according to Nokia Data’s president Viittorio Levi, a totally different association – Nokia Data, as a systems integrator, represents Bull in Finland, and the discussions were about extending distribution into the rest of Scandinavia. Following differences of opinion between Bull and Nokia Data about the potential of the Norwegian and Swedish Unix markets, Nokia Data withdrew its proposals. It was suggested that Bull was not happy that Nokia Data would be pushing Tandem Computers Inc fault-tolerant machines and Sun Microsystems Inc servers alongside Bull’s products. The Finland distribution agreement will, however, continue, with Bull’s consent. Similarly, Hitachi and Tandem distribution deals will also now be re-negotiated. ICL is likely to be the last resting place for Nokia Data, which started life as the computer arm of SaabScania AB and passed through Swedish state ownership and L M Ericsson Telefon AB. Hungry ICL is on the look out for further acquisitions but Peter Bonfield was adamant that Siemens-Nixdorf Informationssysteme is not in the running – the Fujitsu connection, he said, is largely irrelevant since ICL’s relationship with Fujitsu is purely at arm’s length – where have we heard that one before. Instead, ICL will be pursuing software houses for now.