Leamington Spa, Warwickshire-based computer systems supplier DCS Group Plc will gain a facilities management business and strengthen ties with IBM Corp following its announcement that it is to buy Computer Services for Industry Ltd, in which IBM has a 10% stake, for ú8.2m. The deal will be underwritten by Allied Provincial Securities Ltd. IBM will exhange its 10% stake in Computer Services for a 5% stake in DCS. DCS shares are valued at 80p, 2 pence up their price two days ago when shares in the company were suspended. To finance the deal DCS will raise ú3m through a placing and open offer of 4.7m shares at 75p. The company will pay an initial ú6m plus a profits-related sum up to ú2.2m in shares. Computer Services, which is twice the size of DCS in turnover, profits and people made ú0.7m profits on a turnover of ú13.5m last year. It operates out of two office in Bath, Somerset and Woking, Surrey. A third of the company’s business comes from supply chain management software and systems for manufacturing and distribution sectors. The company develops a product called Computer Integrated External Logistics or CIEL which is used by freight forwarding companies for order processing. It is also a reseller for System Software Associate Inc’s Business Planning Control Systems. A further third of revenues come from its technical support service for AS/400 and RS/6000 machines. The remainder is made up of computer services and outsourcing. The company got into the facilities management business after wining an ú8m contract to support 65 AS/400 machines for Northern Foods a year ago. The enlarged group will employ approximately 450 staff, supporting 1,500 customers from 13 UK offices. Its current turnover is roughly ú24m per year. DCS acquired Motis Ltd and the DMS division of GSI UK Ltd to increase its presence in the motor dealer management systems market. DCS’s core business is is in developing and supplying Unix-based systems for car dealerships companies to manage sales and stock. The company hinted that the acquisition is not likely to be the last. It is now looking at specialist information technology businesses to fit into its current portfolio.
