In addition, Computacenter will sell its existing business interests in Germany to GECITS. Computacenter and GECITS also announce the intention to create a new international IT alliance to enhance their service to customers.
The acquisition and integration of GECITS businesses will add to the service offering in Computacenter’s existing UK operation and significantly enhance its service capability in France. The combined businesses will offer the opportunity to strengthen the services proposition for customers and build on advantages of scale to accelerate market share. The acquisitions also reflect Computacenter’s continuing move towards a higher margin, value-added services business.
In Germany, Computacenter will sell its operations to GECITS’ business, which trades under GE CompuNet. Computacenter’s German business has made considerable progress following a rationalisation of branches earlier in the year. However, as Computacenter has previously indicated, it lacks the scale to compete effectively and the company believes the combined businesses of GECITS will offer a more credible proposition for customers in that market. Computacenter expects to take an exceptional charge for restructuring and asset write downs of its German operation of approximately £9.6 million at the year end, of which £2.5 million is non cash relating to asset write downs.
Sale price of £177,773 for the business and certain assets.
We would expect the transactions to be marginally earnings enhancing next year, however, benefits from the Alliance are expected to be more immediate.
The proposals are subject to full consultation with employee representatives and full regulatory approval. Both companies are committed to fulfilling their employee and social partner obligations. The companies will make every effort to support their employees through the decision-making process and beyond.
Computacenter’s operations in Belgium and Luxembourg will not be affected.
The Alliance
Computacenter and GECITS also announce the formation of a new partnership to provide IT infrastructure solutions and services to companies operating across international markets. The strategic alliance will leverage the existing operations and partnerships of Computacenter and GECITS to provide coverage in 50 countries across the globe. The Alliance will bring major benefits to customers and give them a consistent standard of excellence by dealing with market leaders in each country. Having a focused European presence will also benefit Computacenter and GECITS’ relationships with partners and vendors.
Commenting on today’s announcement, Mike Norris, CEO of Computacenter said:
The acquisition of GE Capital IT Solutions’ French and UK operations offers real opportunities for growth in our core markets and will improve our service proposition for customers. It will also bolster our operations in the countries where we are market leaders. Earlier this year, we stated that our German business lacked the scale to compete effectively. Following a recent restructuring our performance has improved considerably, but we still believe that this business will be a better strategic fit with GE Capital IT Solutions’ operations.
The Alliance is a new and very exciting development for the European IT market, and for Computacenter. It will bring major benefits to customers and strengthen our relationships with major partners and vendors. It positions us ideally to meet the infrastructure service needs of multinational companies through increased scale and reflects the changing dynamics of the market.
John Oliver, CEO of GE Capital IT Solutions, commented:
Our alliance creates a new force in the European and global IT industry. The proposed alliance with Computacenter and other key partners will provide our customers with a new level of seamless global services and solutions. We believe that this will accelerate GE Capital IT Solutions’ growth and broaden our capability. Serving our customers will remain a major focus throughout the transition for both companies.
