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July 12, 1993

SLIGOS, MARBEN EXPLAIN THE RATIONALE FOR THEIR MERGER AGREEMENT

By CBR Staff Writer

Taking advantage of a natural partnership, Sligos SA, France’s second largest software house, and Marben SA, a much smaller specialist in networking, agreed, as reported briefly (CI No 2,206) to a share exchange that should give Sligos full ownership and double its systems engineering ability in France. The partnership is natural from the synergies it provides and also since both companies are affiliated to Credit Lyonnais. Data and telecommunications elements are ever more present in our large projects, and Marben provides a complete range of skills in that area, said Henri Pascaud, vice-chairman of Sligos. We wanted to reinforce our engineering capability in France, and this represents a doubling. From financial point of view, the purchase of Marben, which boasts a net margin of approximately 8%, should boost the total profitability of Credit Lyonnais’ informatics holding company. The joining of the companies, through the stock swap in which five Margen shares will be exchanged for two of Sligos, is intended to augment Marben’s weight in the market, said Marc Benhamou, president of Marben. Our size and, thus, our credibility do not match our ambition. We had two choices, to grow either internally or externally. Since internal growth is difficult and limited, our only choice was to join up with someone of bigger size. Sligos, which has the same parent company, was the natural partner. Marben reported 1992 revenues of $76.5m and net profit of $6.2m, while Sligos chalked up revenues of $662m and group net of $31.5m. Sligos hopes to acquire 100% of Marben’s shares with its open offer. Says Gerard Bauvin, president of Sligos and of Credit Lyonnais’ informatics holding company, For the last year, I have been trying to build a co-operative of software and systems engineering companies, not a mega-company. Our ambition for the next couple of years is to find ourselves among the big software and systems houses on the European level, although we’re not trying to overtake EDS, he said.

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