The chairman and chief executive of ServiceTec Ltd admits to being an avid Sunday Times reader. Andy Anderson says that his acquisition of Ferranti International’s Service and Maintenance division along with the Electronic Support Centre of Ferranti Computer Systems (CI No 1,325), would never have happened without the aid of that much maligned publication. A small piece in the business section suggested that Ferranti was keen to dispose of its maintenance operations, and within 21 days of reading the article, Anderson saw ServiceTec grow from a UKP2m company with 30 staff, to a UKP14m organisation with 250 employees. Despite two other bids, one of which was offering UKP1m more than Anderson’s UKP19.5m, Ferranti accepted ServiceTec’s offer. Ferranti retained a 4% stake in the enlarged company, and Bill Broekhuizen, managing director of Ferranti Computer Systems, has a seat on the ServiceTek board. Anderson says that the days leading up to the inverse acquisition were heady wine, and acknowledges that he enjoyed the games that grown men play and call negotiating. He’s only 32, and with one exception, the entire board of ServiceTek is under 33. They emerged from the Dataserv stable after BellSouth’s Dataserv Inc reorganised its European operations and subsequently acquired Krypton Engineering from the Krypton Group for UKP2m (CI No 1,196), and formed ServiceTek both as a means of getting back into maintenance and as a vehicle for acquisitions. The company operates in three main areas. Third party maintenance is the most significant division, generating 80% of revenue. Fourth party maintenance – that’s where a company looks after just one element in an integrated system – of printed circuit boards contributes 10%, with calibration and test equipment responsible for the rest. Anderson strongly disputes the suggestion that personal computer maintenance is ServiceTek’s raison d’etre. He’s not that keen on personal computers, and describes ServicTek as a systems maintenance house. 70% of revenue comes from corporate accounts, and only 30% is derived solely from micros. The company claims to be the country’s largest independent maintainer of IBM’s hardy perennial, Series 1 hardware. It also maintains System 34 and System 36 machines, and is currently discussing the possibility of AS/400 maintenance. Anderson says that despite the reluctance of System 36 users to migrate to the AS/400, the trend is both visible and inevitable. ServiceTek initially intended to maintain System 38s, but decided to hang fire until Ferranti’s contribution could be assessed. Anderson says that Ferranti’s culture was broadly similar to that of the Civil Service. Conservative, unhurried, and traditional. That has its downside since defence is no longer sexy. However, Anderson praises the level of skills that Ferranti’s man and boy ethos produced, and he believes that ServiceTek now has one of the most highly trained workforces in the UK. Ferranti has expanded ServiceTek’s activities in several fields. The two companies have a 10-year trading agreement, and Ferranti’s Argus machines are so idiosyncratic that no one else can maintain them. It also has a strong terminal and office products base, and government contracts are significant. Acquisitions feature strongly in the ServiceTek philosophy, but Anderson sounds a note of warning. He believes that success in the UK maintenance market means addressing niche sectors. Anderson thinks that Granada’s portfolio is now too wide, largely due to its aggressive acquisition policy. He doesn’t foresee ServiceTek moving into the DEC arena, and says that the smaller the product range, the easier it is to control logistics and consequently, the economics of a business. Nonetheless, Anderson has no doubts that ServiceTek will expand by acquisition. He wants to make a continental purchase before 1992, and is particularly interested in France, Spain, and Italy. Eastern Europe does have potential, and if Ferranti wants to market there, he’d be happy to do the maintenance. – Janice McGinn
