Perot Systems Corp, the Dallas, Texas computer services firm which is 42% owned by former presidential candidate Ross Perot, is planning to raise $115m through an IPO. Founded by Perot in 1988 following his departure from Electronic Data Systems Corp, Perot Systems has enjoyed rapidly-growing revenues which climbed from $342.3m in 1995 to $781.6m last year. Net income was just $11.2m in 1997 but figures for the six months to June 30 show income has increased from $8.1m to $19.1m on revenues 27.8% higher at $452.7m. Including Perot’s 42% stake, the board controls over half the equity of the company but Perot Systems stock is also widely held by employees. Hence an IPO is now considered essential so that staff can realize a value for their current holdings as well as giving the company a chance to retain staff through stock option incentive schemes. Perot’s biggest client is the $600bn Swiss banking giant UBS and in the first half of this year UBS provided 23.4% of revenues. To cement the relationship, the bank has already purchased 50,000 shares in Perot for $7.30 per share while also purchasing 3,617,160 options for $2.25 each. The options have an excise price of $7.30. The bank also provides Perot Systems with a ‘poison pill’ as it comes to market. If a competitor buys more than 25% of Perot Systems, UBS has the right to cancel its contract – making a take-over an unattractive option. After seeing what GM did to EDS, Perot has no intention of losing control again.
