The share price of consultancy and software house Comac Plc, has soared since Philip Swinstead, founder and former chief executive of UK software house SD-Scicon, bought a 19.47% stake on Monday. Up 25 pence after the news broke, it put on another ninepence on Tuesday to close at 78 pence. After two years of submitting to a non-compete clause with Electronic Data Systems Corp following its purchase of SD-Scicon in August 1991 (CI No 1,741), Swinstead is back in the computer game and has big plans. Although he has been looking round for suitable small companies to buy ever since, it all just came together with Comac. HIT Investments Plc, a subsidiary of food group Hillsdown Holdings Plc, decided to sell its entire 46.78% shareholding in the firm – over the past few months, it has been disposing of some of its peripheral investments.
Potential of the company
So Swinstead, seeing the potential of the company, moved in and bought his current stake for UKP720,000 in a concert party with merchant bank, Samuel Montagu & Co Ltd, which purchased a further 10.5% of shares – he has worked with Samuel Montagu since the old days when the firm advised him over the protracted and messy take-over battle with EDS. However, acting as agent, Samuel Montagu also took the remaining 16% of shares, which brokers James Capel & Co, simultaneously placed with institutions. Swinstead said these were snapped up within half an hour. An announcement will be made soon as to the five big investors are. The reason his stake isn’t larger, Swinstead said, is that he wanted to avoid taking a 30% stake in Comac under UK law, this would mean he had to make an all-out bid. And he was loath to jeopardise the company’s postion on the Unlisted Securities Market, and all the attendant benefits that go with it as far as acquisitions go. He reckons that going for a full listing is the next fence, although he could provide no timescale for this. Nonetheless he believes that, for the time being at least, there are tremendous opportunities in Comac’s existing markets and he is keen to grow what he’s got. The Hatfield, Hertfordshire firm’s core business is hiring out contract computer programmers and consultants, mainly on a long-term basis, to blue chip companies. It also does a bit of recruitment. Some 70% of its UKP11m turnover in 1992 was generated by Comac Contracts in the UK, and by a general computer consultancy, Systems Evolutif Ltd, in which the group holds a 38% stake. The rest came from a similar business in Germany, Shuter Smith, which also operates in Belgium and Holland. It did some UKP450,000 pre-tax. But over the next six months, Swinstead, with the help of old chums intends to start a systems integration business, specialising in communication systems and networks as well as open systems for small to medium-sized organisations. His aim is to be pre-eminent in both the agency and systems business, but in the chosen niche markets. He does envisage some small acquistions here, but wants to get the management right first. At the same time Hillsdown decided to sell, Comac’s chairman, Michael Teacher, who put in about one day a week and spent the rest of his time on Hillsdown affairs, was promoted and resigned from the board. His replacement is Bernard Friend, who was formerly finance director at British Aerospace Plc and has known Swinstead since his SD-Scicon days. Swinstead is now chief executive and Ian Scroggins, marketing director of System Designers and then SD-Scicon between 1974 to 1991, takes the same post at Comac.
