Although SysOpen [SYS1V.HE] announced earlier this month that it would buy Novo [NOV1V.HE], that deal has now been terminated in favor of WM-data’s [WM-B.ST] newly tabled offer. A merged WM-data/Novo business would have a strong position in all the major Nordic markets and be better able to compete with global rivals, such as IBM [IBM].
WM-data has launched a successful counter bid against SysOpen to acquire Novo Group.
Stockholm based WM-data has offered to pay E200 million in cash and shares to acquire Finnish IT services group Novo, compared to SysOpen’s E155 million offer. WM-data will offer E2.5 in cash and 1.5 new shares for each Novo share, or a total cash option of E5 per share up to a total of 10,000 shares, which values Novo at a premium of 42% above the company’s closing share price on September 24, the day before SysOpen made its own public offer.
The combined WM-data/Novo business would have combined pro forma net sales of E1.08 billion in 2002, and a workforce of 8,482 people. The now-terminated Novo/SysOpen deal would have created a much smaller firm with revenue of E338 million in full-year 2002, and 2,661 employees.
More importantly, the Novo deal would significantly boost WM-data’s presence in Finland, where it currently makes just 10% of its revenue or around E73.2 million. Novo, meanwhile, makes the majority of its E308.5 million revenue here.
Should the deal go ahead, Novo will be merged into WM-data’s existing Finnish operation and be rebranded WM-data Novo. Finland is also the home of WM-data’s biggest Nordic rival TietoEnator [TIE1V.HE], which ranks as the largest player in the market with revenue of E1.3 billion in 2002, and the new scale will enable WM-data to compete on a more level footing.
The deal would give WM-data a sizable presence in all four of the major Nordic markets – Sweden, Norway, Denmark and Finland. This would enable it to pull away from mid-sized rivals EDB Business Partner [EDBASA.OL] and Ementor [EME.OL], and give it greater potential to compete against global players such as IBM and HP [HPQ], which have recently won major outsourcing deals in the region.
Related research: Reuters Business Insight, The IT Services Outlook (RBTC0063)