A by-product of the stock market crash emerged last week with the news that computer maintenance company Mainstay Group Plc was to be acquired by Granada Group Plc. Mainstay, which had been planning a public listing until the October crash, now sees itself going to Granada for an initial price of ?10.6m. It will continue to operate independently with the coverage and financial backing needed to expand. Shareholders have the option of 166p per share cash, or 60p in cash and the equivalent of 90p in new Granada shares for each Mainstay share in addition to a deferred consideration based on future performance. The Cheadle, Cheshire-based company ranks itself top of the independent computer maintenance market in the UK. It deals in the entire IBM range although mid-range machines are its main business. Other manufacturers are also supported and last year saw the formation of a disaster recovery service. Granada says the acquisition is an opportunity to become more involved in the mid range market. And with a Mainstay branch in Belgium it will be able to expand into the Netherlands building on the base SMS has set there already. Turnover for Granada’s maintenance business in the UK and on the continent is currently running at ?40m to ?45m a year. With the addition of ?7.1m-a-year Mainstay it hopes to boost that to ?50m to ?60m – but maintenance is still only around 5% of its total business of some ?1,020m for 1987. It expects to expand with further acquisitions in the same sector within the next two or three years.
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