If one phrase sums up the business plan of information and outsourced payroll services supplier Ceridian Corp, it is growth through acquisition. Since it was demerged from wounded systems and services giant Control Data Corp in 1992, the company has digested more than a dozen substantial entities, adding half a billion dollars to its increasingly […]
If one phrase sums up the business plan of information and outsourced payroll services supplier Ceridian Corp, it is growth through acquisition. Since it was demerged from wounded systems and services giant Control Data Corp in 1992, the company has digested more than a dozen substantial entities, adding half a billion dollars to its increasingly broad-based computer services operations. Some of the deals over the past year have been geared towards building up the company’s international presence. In October 1995, Ceridian paid $52m for Centre-file, the payroll processing arm of the UK’s National Westminster Bank Plc which did around $33m in business last year. Also in the UK in June, it added Compower Ltd, a $6m payroll bureau. On its home territory, other takeovers were designed to reinforce Ceridian’s core business of payroll processing as well as expand its interests elsewhere in funds transfer processing and information services targeted at vertical industries such as trucking and gambling. In February it took over International Automated Energy Systems Inc, a vehicle fleet management company with $1.5m in revenues. That will slot nicely into the huge Comdata Holdings Corp business Ceridian bought for $900m last August. Comdata provides transaction processing and information services to the trucking and gaming industries, and had revenues of around $250m at the time of the takeover. On a smaller scale last year, the company purchased a $2.5m personnel help desk systems vendor, Information Learning Inc, and EAS Technologies Inc, a $3.5m time and attendance software vendor for $13m. The company has also bought Resumix Inc, a supplier of human skills management software and services, which had 1995 revenues of $25m. Helped by these 1995 acquisitions, Cerdian’s revenues in the financial year to 31 December rose 13% to $1.33bn. That represents a doubling of its growth rate over 1991 to 1994. And excluding those charges associated with acquisitions, Ceridian’s net profit was up 34% in 1995 to $97.5m. Ceridian chief executive officer Lawrence Perlman highlights how the defense side of the business – at one time, Ceridian’s mainstay – is pulling in a fast decreasing proportion of overall business – 38%, or $510m in 1995, down from over 50% four years ago. In contrast, information services, which grew by 19% to $824m in 1995 – provides almost two thirds of Ceridian’s revenues, which is up from 59% in 1993.