RealTime IT News

EDS Acquiring Systematics AG

In a move that doubles its footprint in Germany, Plano, Texas-based EDS is acquiring German information technology services firm Systematics AG in a cash and stock deal valued at about $570 million.

Systematics has expertise in CRM, ERP, digital value chains and systems integration.

"EDS will be better able to bring comprehensive, targeted industry service offerings to Europe by combining Systematics' local industry knowledge and systems integration expertise with our significant strategic infrastructure outsourcing business," said Dick Brown. EDS' chairman and CEO.

EDS said it will pay approximately $430 million in cash and issue $140 million in EDS shares to acquire all outstanding Systematics shares.

Systematics serves clients through four divisions: e-consulting, e-applications, systems services and hosted services. The company has a major presence in strategic business locations including Berlin, Cologne, Munich, Frankfurt and Stuttgart.

EDS said the acquisition "is expected to be neutral to earnings for the remainder of 2001 and accretive in 2002."

"Big companies like EDS have been trying to get into the German market for some time now and they can't do it through organic growth alone -- they need to make acquisitions," Markus Golinski, an analyst at Bank Sal Oppenheim Jr & Cie, told Bloomberg News.

The purchase will give EDS about $1 billion in annual sales in Germany, Brown said.

EDS shares were down $1.36 to $54.50 in mid-morning trading.