Electronic Data Systems Corp, the US computer services group has bought up the remaining 52% of financially distressed Neodata Services Inc, the Louisville, Colorado-based company which specializes in direct marketing for the publishing industry. The acquired company is to be merged with EDS’s CustomerSolutions division to form a direct marketing giant with estimated annual turnover of $750m, employing 10,000 people. EDS is to pay $67m in cash together with the assumption of a crucial $210m in debt. Neodata turned over $196m in the nine months to March 31, making net losses of $1.3m and the balance sheet is heavily negative, with cash pouring out of the company to service debts. The company incurred one off charges of $1m in March to re-organize its debt structure. EDS has held an equity stake in Neodata since 1990 and the purchase of the remaining majority interest follows the familiar pattern of strategic partnership followed by outright acquisition. Larry Jones, chief executive officer of Neodata, is to stay on for the transition period but no role has been outlined for him in the merged entity. EDS’s Bob McCashin will head up the new division.
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