Wang Global Inc, the company formed by merger of Wang Laboratories Inc and Ing C Olivetti SpA’s Olsy systems and services division, has produced a first quarter which shows some of the pain and none of the gain to be produced by the new organization. The figures show only 14 days of Olsy operations but are hammered by a $55.7m restructuring and integration charge. Results are likely to be clouded by the Olsy integration for some time. Wang has announced that at least $380m will be needed over the next two to three years and that jobs will be lost as the company rightsizes (CI No 3,384). Wang will have to work hard if it is to ensure the acquisition to be accretive to earnings per share within 12 months. Chairman and CEO Joseph Tucci however is confident that they are well on their way to a target of $300m gross earnings in calendar year 1999. With a 10% shareholding in the new operation, Wang Global’s progress will be watched with close interest by Microsoft Corp, which has much to gain from the success of such a worldwide ally. Wang claims it won new contracts worth $266m for the quarter – a win rate of 40%. It has also extended its partnership with Dell Computer Corp to provide support for its customers. With friends in all the right places, Wang Global will prosper in the long-term. However, turning round an Olsy operation that used to bleed Olivetti cash is a huge undertaking and it will be a major achievement to meet its profits target.
