Underlining the position of strength conferred on a company by a clean exit from Chapter 11 bankruptcy protection, with all debt replaced by paper, Wang Laboratories Inc now feels strong enough to start buying, and yesterday it announced a deal with Compagnie des Machines Bull SA under which Wang will pay about $160m – $110m in cash, $25m in Wang shares for a 4.9% stake, and $25m in short-term notes, for Bull’s workflow and imaging business, its US field maintenance services business, the Bull subsidiaries in Australia, New Zealand, Canada and Mexico, and its Honeywell Federal Systems Intergration business; each will be combined with Wang’s activities in the same fields. The businesses to be transferred to Wang are expected to generate revenues of some $450m in 1994, of which about $320m are in the US. Wang expects the proposed transaction to increase its per share earnings and cash flow. The two also agreed reciprocal distribution agreements in enterprise servers, Unix systems, personal computers and workflow and imaging products. Bull’s greatly contracted US business will then concentrate solely on GCOS enterprise servers – mainframes by another name, PowerPC Unix systems and software, Zenith Data Systems micros and commercial systems integration. Bull will reinvest the proceeds of the transaction to strengthen its US business, where it still expects to do $1,200m this year.
