A source at a US-based outsourcing advisory company told ComputerWire that Dallas, Texas-based ACS is planning an acquisition in Europe. ACS needs to build up its European business, he said. In Europe ACS has a delivery center for General Motors, and is in the process of an acquisition. When asked about the possibility of a move for human resources outsourcing and systems integration company Arinso International, he said: ACS appears to be making an investment. That would be a good company.
Brussels, Belgium-based Arinso was unavailable to comment. However, Brian Stones, who was recently hired as European SVP for ACS, told ComputerWire: I can’t comment on anything specific like that but confirmed that ACS is looking to make an acquisition in the market. We will make an acquisition in Europe this year, he said. We are looking at companies in certain specific areas. For example, we may acquire assets from certain customers.
ACS’s biggest contract in Europe is with General Motors Europe. ACS signed the $200m seven-year deal in November 2003 to support HR services for approximately 75,000 active and 35,000 inactive GM Europe employees across 10 European countries. ACS works on this deal with Arinso to provide recruitment, personnel administration, time keeping and payroll, expatriate payroll, travel and expense, training, reporting, and data archiving. ACS will deploy PeopleSoft HR across Europe and will use SAP as a support mechanism to provide payroll capabilities. ACS also provides transactional accounting services for GM’s European operations from its service center in Barcelona, Spain.
Arinso as a whole has expanded into 22 countries with a total of almost 1,800 employees. Its largest customer is Shell, for which it does HR management systems work, and which accounted for 15% of Arinso’s 2003 revenue of 130m euros ($174m). The ACS/General Motors contract accounted for 6% of 2003 sales, and is worth some $126.1m to the company over the lifetime of the project.
Industry sources believe Arinso would be a good fit for ACS. ACS is also notable for its lack of European presence among its tier-one rivals such as IBM, EDS, and Accenture. Stones told ComputerWire that the company currently employs some 700 people in Europe, of which 350 are based in Barcelona, with the remainder spread between offices in the Germany, the UK, France, Ireland, Germany, and Switzerland. It has about 150 people at its near-shore IT outsourcing center in Cork, Ireland.
Stones said his aim is to build the European operation into a base that will generate some 10% of ACS’s revenue, or approximately $400m based on ACS last full year revenue of $4.1bn. We will look to do better than that, he said. It is not all going to come from organic growth though.
It should be noted however that any acquisitive approach for Arinso would have to get the green light from CEO Jos Sluys, who owns two-thirds of the company’s entire share capital.
