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September 15, 1998

ALLIANCE GIVES UK-BASED COMPEL INTERNATIONAL REACH

By CBR Staff Writer

Compel Group Plc stands out from the ranks of European systems integrators in one respect: it has absolutely no plans to make an acquisition in the US. Despite pushing net income dor the year up 85.2% to 6m pounds on revenues up 88% at 210m pounds, it has no ambitions to buy up a company outside the UK. Chairman and chief executive Neville Davis acknowledges that overseas acquisitions are regarded as exciting activities for companies in a hurry to expand, but it is not something that Compel plans to emulate. There is, he points out, plenty of expansion remaining in the UK market. Successful overseas expansions have been achieved by companies like Sage Software, but there are many international acquisitions whose failure attracts nothing like the same amount of publicity. So how does Compel cope with the demands of multinational organizations who increasingly demand an international solution to IT problems? The company is the sole UK member of GlobalServe, an international alliance with around 50 members covering virtually every world market. Compel is one of four core members with Compucom Systems Inc, a Dallas, Texas-based company; Compugen Systems Ltd of Canada; and Infopoint SA of France. The idea behind GlobalServe to enable each of its members to focus on their own geographic region, while having the capability to provide international service. Revenues are confidential and clearly modest at present. While such alliances are familiar in telecommunications, success in the systems integration market has yet to be proven. The one possible weakness in the approach is that in leaving Compel with only expansion possibilities in its home market, it will itself become a target for a fast-growing international predator.

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