By Antony Akilade
Reports circulating last week that Cambridge Technology Partners (CTP) was the subject of acquisitive interest from UK-based global carrier Cable & Wireless Plc (CI No 3,715), appear to have focused some senior minds at the Massachusetts systems integrator. After careful consideration, said CTP’s written response to ComputerWire, the board of directors has concluded that the company is not for sale.
Speculation that CTP, with a market capitalization of around $1bn at current prices, was a likely takeover target began last year when the company turned in a poor set of figures at a time when it faced the challenge of achieving its next level of growth. With its reorganization program said to be 75% to 80% complete CTP’s board of directors stated that it will ensure that proper investment and infrastructure is made to allow it to achieve this.
Investment analyst Steven Birer at BancBoston Robertson Stephens believes that CTP has turned the corner. Basing his opinion on sequentially improving results for the second quarter ending June 30 1999 he expects operating margins currently down at 7.1% to return to double digits in the next year. Birer is cautious in his assessment though noting that the much depends on the current restructuring.
A spokesperson for Cable & Wireless meanwhile said that although there was plenty of organic growth in the company’s data and network services operation they would continue to look at opportunities. Despite this the company still lacks a CTI outsourcing service arm comparable to that of say BT with its BT Solutions division which returns revenue of around $2bn a year.
