ICN Direct Newswire

July 2003

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** LATEST NEWS IN THIS WIRE **

1. PwC sells BPO business to Exult
2. Deloitte chooses European consulting leader
3. Getronics sells stake in Merkantildata
4. SBS eyes East European market
5. Further information - feedback/forward to a colleague/unsubscribe

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1. PwC SELLS BPO BUSINESS TO EXULT

PricewaterhouseCoopers has sold its international business process outsourcing (BPO) operations to human resource outsourcing specialist Exult in a $17 million deal.

Bowing to regulatory pressure to divest non-audit businesses, PwC has lost not only blue-chip BPO clients including Standard Chartered Bank, Tibbett & Britten, Grupo Algar and Safeway, but also 500 employees, of whom 350 are based in the UK with the remainder at service centres in South America and Eastern Europe, or PwC locations in Western Europe, Hong Kong and Singapore.

Richard Smith, a London-based PwC partner and global BPO leader, said: "BPO has been a strategic service line within PwC for several years and the business has gained recognition as a leader in the BPO market. However, the demands of the regulatory environment have caused PwC to divest this business. We have selected Exult as the best choice to serve our key clients."

Despite the sale, PwC has retained one international BPO contract, but declined to name the client.

Exult, a leader in HR BPO for global 500 companies, claims the acquisition will be accretive to earnings from the beginning of 2004 and will deliver a significant revenue increase as the business includes contracts with remaining terms of between two and six years and total scheduled revenues of $100 million.

In 2002, Exult reported a net loss of $10.6 million on revenues gaining 54% to $420.4 million. The company is based in Irvine, California and has client service centres in the US, Canada, Europe and India.

Exult founder, chairman and CEO Jim Madden described the acquisition as an "important milestone" for the company.

2. DELOITTE CHOOSES EUROPEAN CONSULTING LEADER

Deloitte Touche Tohmatsu has named London-based Deloitte Consulting partner Eggie Kock as European leader of the consultancy organisation it is rebuilding after failing to separate its audit and consultancy activities.

In an email to partners, Deloitte Consulting chief executive Paul Robinson said it was important to get regional leadership in place, particularly in Europe where the consultancy has numerous practices across the region.

To date, Deloitte Consulting UK and Germany have agreed to Deloitte Touche Tohmatsu's global plan of integrating consulting back into the Deloitte & Touche audit base. The consulting and audit businesses in Italy have yet to reach a decision on their future, while France stands by its proposal to separate from the audit business for regulatory reasons. Spain will remain separate from Deloitte & Touche, but operating under the Deloitte Touche Tohmatsu umbrella as it has been since 1997.

Kock, a senior UK partner leading Deloitte Consulting's European consumer business industry practice, will take responsibility for directing the resulting consultancy operations across Europe. He will continue to be based in London and will report to Robinson, the recently appointed Deloitte Consulting chief who is tipped to become the global leader of Deloitte Touche Tohmatsu's extended consultancy business.

Globally, the business will be a major contributor to Deloitte's annual revenues of about $3.5 billion from consulting and advisory services. It will target clients from the global top 100 down to the mid-market, offering consulting and IT services broadly in line with those of Deloitte Consulting and its new compatriots - including strategy and operations, organisation and performance, customer relationship management, supply chain management, enterprise applications, technology integration, outsourcing and human capital.

3. GETRONICS SELLS STAKE IN MERKANTILDATA

European IT services supplier Getronics is continuing its fight back to financial health with the sale of its 10.3% stake in Norwegian information, communications and technology company Merkantildata.

The disposal - to a group of Norwegian and international investors - is in line with Getronics' programme of divesting non-core businesses and assets. It will net total cash proceeds of $13 million.

Despite the sale, Getronics said it will maintain a business partnership with Merkantildata. The companies have worked together in Scandinavia since 2000, Getronics using Merkantildata as a preferred business partner, with the result that the firms share some international clients.

Separately, Getronics is adding two industry heavyweights to its supervisory board. They are Berend Brix, most recently a member of the group management committee of Cap Gemini Ernst & Young, and Marinus Minderhoud, a member of a number of supervisory boards in The Netherlands and former chairman of ING Bank.

4. SBS EYES EAST EUROPEAN MARKET

IT services supplier Siemens Business Services (SBS) has secured contracts worth $33 million in Latvia and Hungary as it pursues government money in countries joining the European Union.

SBS' latest wins require it to build and run an electronic archive for Hungary's 270 notaries and to install a border control system in Latvia that will help the country meet requirements for joining the EU next year. The Latvian system will be based on a wireless point-to-point communication infrastructure and web-based software, and is similar to an SBS-developed Lithuanian system that went live last year.

In Hungary, SBS will open an electronic archive for the country's notaries in 2004 and operate an online access service and helpdesk from local data centres.

The company is counting on demand from EU accession countries to make their administrative processes electronic, to help it replicate the success it has had with public contracts in Western Europe. According to a Gartner Group research study, SBS is the leader in Western European public contracts.

Its group president Paul Stodden commented: "In our estimation, the Eastern European EU candidates represent a market for IT services in the range of tens of billions of dollars."

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