SHL Systemhouse Inc and BCE Inc have revealed more details of the global partnership just signed between themselves and BCE’s Bell Canada subsidiary (CI No 1,853). The partnership is about to be signed and sealed, once operating and other agreements have been reached. The terms of the agreement, laid out in a memorandum of understanding, stipulate that SHL Systemhouse will acquire the data centres and related operations now run by Bell Canada and enter into a 10-year, renewable agreement to provide these services to Bell. The agreement, which SHL Systemhouse reckons is one of the largest of its type, would integrate Bell Canada’s existing data centre and related operations as a core delivery capability of Systemhouse’s Computing and Network Services business, resulting in cost savings to Bell Canada and a large-scale Canadian facilities management capability at Systemhouse. At the same time, Bell would create a new company in which Systemhouse would have a significant ownership position – of up to 30%. The new company, comprising Bell’s existing systems integration activities currently being performed by some 2,000 staff, would service Bell’s needs and also provide systems and expertise to the Canadian and global telecomms industry. Meanwhile Systemhouse and Bell Canada would create a strategic alliance which would provide seamless integration and facilities management services to Bell and Systemhouse customers globally, with Systemhouse acting as integrator and Bell as network supplier. This alliance is said to be a significant reason for the strategic partnership. The operating and other agreements necessary to facilitate all these arrangements would be on profitable commercial terms and are expected to be worth several billions in revenues over the initial 10 years of the strategic partnership. SHL will offer some 32.5m treasury shares at $12.75, giving BCE around 60% of the then outstanding shares of Systemhouse, and Systemhouse will in turn expect to use all the proceeds to acuire certain assets from Bell Canada. BCE will not increase its fully-diluted ownership of Systemhouse beyond 62% for 10 years without approval of non-BCE representatives on Systemhouse’s board. This provision will remain in place until the 5m shares controlled by BCE, but not owned by it, are transfered to the ownership of BCE or sold. BCE has agreed that Systemhouse will remain a public company; the board of Systemhouse will be expanded and BCE representation will be between 25% and 30%.
