ICN Direct Newswire

October 2003

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** LATEST NEWS IN THIS WIRE **

1. Atos Origin pays $1.5bn for SchlumbergerSema
2. EDS plans partial sale of PLM business
3. Deloitte rebrands
4. Unisys buys KPMG Consulting in Belgium
5. Getronics continues fightback
6. Further information - feedback/forward to a colleague/unsubscribe

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1. ATOS ORIGIN PAYS $1.5BN FOR SCHLUMBERGERSEMA

Atos Origin has agreed to buy SchlumbergerSema's IT services business from oilfield services giant Schlumberger in a deal valued at $1.5 billion.

The agreement is subject to regulatory and shareholder approval, but is expected to be completed no later than January 2004 and to be earnings accretive to Atos Origin next year.

It also includes an IT services deal under which Atos Origin is expected to generate minimum revenues of $804 million.

The combination of Atos Origin and SchlumbergerSema will create a global consultancy with 50,000 staff operating in 50 countries and annual revenues of more than $5.7 billion.

Atos Origin chief executive Bernard Bourigeaud said: "This transaction provides Atos Origin with critical mass in almost all of the major IT spending markets of Europe, together with strong extended support coverage on a global basis. This is absolutely essential if we are to provide our clients with effective support and have the capacity to win major new clients."

Atos Origin is paying a total of $1.5 billion, comprising $459 million in cash plus 19.3 million Atos Origin shares representing 28.9% of the combined group's capital. Subsequent to closing, Schlumberger will reduce its shareholding in Atos Origin to 19%, improving the company's stock liquidity.

While Atos Origin will acquire SchlumbergerSema's IT services business, Schlumberger will still own specific SchlumbergerSema units including business continuity, Swedish database company Infodata and the telecoms software products that came from Sema's ill-fated acquisition of LHS Group. These, together with smart cards, point-of-sale terminals and payments systems, are being prepared for sale by Schlumberger.

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2. EDS PLANS PARTIAL SALE OF PLM BUSINESS

EDS is considering an initial public offering or the sale of a minority stake in its product lifecycle management solutions subsidiary, as it sticks to its strategy of concentrating on core IT outsourcing work.

EDS chairman and CEO Michael Jordan, who launched the strategy in June, said: "A minority IPO or private offering in PLM Solutions would enable EDS to leverage the value of this key asset. By operating as a software company in a growing space, PLM Solutions will be able to focus solely on the PLM market, while in turn supporting EDS' sharpened focus on its core business."

PLM Solutions comprises a number of EDS' applications and services geared to the product lifecycle. In fiscal 2002, it generated $138 million in operating profit and revenues of $879 million. In 2002, it contributed 4% of EDS' total revenues of $21.5 billion, but was the fastest growing business on 16% and the only one to achieve profits growth.

Tony Affuso, CEO of EDS PLM Solutions, commented: "We expect this alternative would enable PLM Solutions to be more agile in the market, make decisions more quickly and more effectively leverage our roots as an independent software company on behalf of our customers. At the same time, PLM Solutions would continue to be able to leverage the support and IT services expertise of EDS. It's a win-win scenario we are looking forward to."

EDS plans to complete the divestiture of a minority interest in PLM Solutions in the first half of 2004.

3. DELOITTE REBRANDS

Deloitte Touche Tohmatsu has rebranded its own operations and those of Deloitte & Touche and Deloitte Consulting under the 'Deloitte' name.

The decision follows the integration of Deloitte Consulting back into its audit parent to create the only big accounting firm with a large internal consulting operation.

Deloitte Touche Tohmatsu global CEO William Parrett explained: "The new brand name is a reflection of the greater capability and array of services that we can offer to clients as a multi-disciplinary firm. The breadth of our vision and our ability to respond globally is more comprehensive than any other professional services firm."

The branding announcement accompanied Deloitte Touche Tohmatsu's 2003 financial report, which showed worldwide revenues rising for the 10th consecutive year, up 20.8% on fiscal 2002 at $15.1 billion.

Deloitte attributed much of the gain to the Andersen practices it acquired early this year after Andersen's break-up in the wake of the Enron scandal. It declined to detail revenues from individual services lines, but noted that consulting income fell. In terms of geographies, Deloitte Touche Tohmatsu's EMEA region achieved 44% growth, with Asia-Pacific up 12% and the Americas up 9%.

4. UNISYS BUYS KPMG CONSULTING IN BELGIUM

Unisys has signed a definitive agreement to acquire KPMG's consulting and SAP implementation operations in Belgium.

The deal, the value of which was not disclosed, will add 150 consulting employees to Unisys' Belgian business which has about 460 staff providing services from technology consulting to systems integration, network infrastructure and outsourcing.

Unisys will run the acquired consultancy as Unisys Consulting and will not initially integrate it with Unisys Belgium. The new firm will offer operational strategy, business consulting and software implementation to the public sector as well as commercial industries including financial services and information, communications and entertainment companies.

Patriek Zanas, managing partner of enterprise transformation services for Unisys in continental Europe, will lead both the consulting and services businesses in Belgium.

He said: "This is a strategic acquisition. Unisys Consulting will complement the services that Unisys Belgium offers. The people joining us from KPMG are well-known for their hands-on, pragmatic approach and their ability to achieve results with their clients."

Unisys Belgium operates in five markets: financial services, commercial industry, public sector, transportation, and media and communications.

5. GETRONICS CONTINUES FIGHTBACK

Getronics is struggling back to financial health, reporting a profitable third quarter and a successful bond offer that will refinance its existing debt.

The Amsterdam-based IT services group was on the brink of collapse earlier this year but, after installing a new management team, began a slow process of recovery through job cuts, restructuring and the disposal of non-core assets.

Preliminary results for the third quarter show earnings before tax and exceptionals of $4.6 million - reversing a loss of $12.8 million in last year's comparable quarter. Q3 revenue dropped 16.4% to $697 million, with services revenues falling from $565 million to $517 million. But services contributed 74% of total revenues, against 67.7% a year ago.

Getronics said "the vast majority" of countries performed on or above forecast in the quarter, and confirmed that its restructuring and recovery plans in Italy and the Netherlands remain on track. The company accounted for restructuring expenses of $3.5 million in Q3 while employee numbers fell 7.8% to 23,166.

During the quarter, Getronics disposed of two non-core assets: DigitalNet shares were sold for $27 million, resulting in a book profit of about $6 million; and shares in the South African-based IT company CS Holdings were sold for $3 million.

Getronics said its recent offer of $116 million convertible bonds due in 2008 was oversubscribed and that the net proceeds would be used to refinance its existing debt - the very problem that brought it close to collapse earlier this year.

Getronics also noted a continued improvement in employee productivity through the third quarter, and said: "Management believes that earnings before interest, tax, amortisation and exceptionals for the fourth quarter - traditionally the company's strongest quarter - from the ongoing business will show growth compared to last year, barring unforeseen and exceptional circumstances."

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