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A week of billion-dollar acquisitions

Several billion-dollar acquisitions made international headlines last week, while locally, interim results as well as Spicer and USKO had everyone talking.
Paul Booth
By Paul Booth
Johannesburg, 14 Feb 2000

A number of key acquisitions, each valued in excess of $1 billion each, with the Corel/Inprise (Borland) deal being the most visible, dominated the international world of IT and telecommunications last week.

At home, the spate of interim results and the various concerns over Spicer and USKO dominated the local media.

The Corel/Inprise deal is obviously aimed at escalating Corel to be one of the leaders in the fledgling Linux market and to create an entity that could offer some opposition to Microsoft from both a desktop perspective and from a development standpoint. The company tried it before when it absorbed Word Perfect back in 1996, and was subsequently severely hurt by Microsoft. Whether success comes this time, on the back of Linux, remains to be seen. I have my doubts.

On the local front

  • we saw the suspension of Bryant Technology`s shares, following the resignation of the remaining directors;

  • excellent interim numbers from CCH (although income only some 20% of year-end forecast and only 36% of the last full-year`s figures) and Ixchange (income skewed by profits from 8% Goldmine sale, and 85% of sales now generated internationally);

  • satisfactory interim figures from Global Technology (turnover only a little up on last year) and MGX Holdings (but turnover static); and

  • profit warnings from Bynx Software, Synergy and USKO.

[Local]

Local acquisitions, mergers, investments etc (see attachment).

Local Cautionary Notices (see attachment).

Local Listing calendar (see attachment).

Local Result Summaries (see attachment).

Local Major Event Summary (see attachment).

Other local news included:

  • the news that several local companies have been shedding staff, or are planning to, including ATIO, IBM, Oracle, Spicer and USKO;

  • Kalliba Technologies, the first Southern African memory module manufacturer, has been opened (distribution via Axiz);

  • the Spicer/IQ Business group tie-up is now in doubt;

  • Ikwezi, SA`s black-owned telecommunications and information group, is part of the consortium that has won a 51% stake in the privatisation of Ugandan Telecoms; and

  • JD Edwards is looking for acquisitions in its EMEA region, which could mean SA.

Additionally, CCH has re-structured into five units: CCH Infrastructure Services, CCH Hosted Services, CCH Consulting, CCH Software Development and CCH Enterprise Solutions.

On the international front

  • the announcement by Memory Corporation that it would change its name to Dig Plc;

  • NTT DoCoMo, the Japanese mobile telecomms group, is also keen to buy Orange following the Vodafone/Mannesmann merger (bids are likely to be in excess of the $29.4 billion paid for it by Mannesmann);

  • Baan, having disposed of Coda, is now likely to shed Aurum, its CRM business and Caps logistics, a transportation planning and scheduling software system;

  • Business Objects has spun out its Customer Analytics division as Ithena;

  • the European Union has launched an investigation into Microsoft`s Windows 2000, to establish whether the soon-to-be launched operating systems breaks EU competition laws by giving it a stranglehold on server operating systems and dominance in the e-commerce and Web server markets; and

  • F-Secure, a provider of security systems, has received the Technology Pioneer Award from the World Economic Forum.

[International]

International acquisitions, mergers, joint ventures etc (see attachment).

Other international news:

  • the announcement by 3Dfx that it would shed 20% of its staff;

  • the appointment of Stewart Nelson as COO at Novell;

  • the news that Cable & Wireless subsidiary, Hong Kong Telecom, was in merger talks with both Singapore Telecom and Pacific Century CyberWorks; and

  • the announcement that Cabletron Systems will split into four independent operating companies, each of which will go through an IPO some time this year. These new companies will be Riverstone Networks (target - service providers), Enterasys Networks (target - Global 2000 enterprise market), Global Technology Network Services (consulting, design, performance, management and security) and Aprisma Management Technologies (ex-Spectrum - Network Management Suite).

Financial results

We saw excellent figures from ATMI, Cisco, Credence Systems (back in the black), Cunningham Graphics, NetCreations, Network Solutions and TriQuint Semiconductor.

Losses came from Advanced Comms, Aether Systems, Alpnet, American Mobile Satellite, AmeriQuest, AmTec, ANTEC, Applied Imaging, Bitwise, Computone, CVF Technologies, Cylink, Data Critical, Data Transmission Network, Dataware Technologies, EarthLink Network, Elcom International, Enlighten Software, En Pointe Technologies, FieldWorks, Firstwave Technologies, Giga Information Group, Glenayre Technologies, Global TeleSystems, Golden Telecom, GraphOn, Gresham Computing, Groupe Bull, GTC Telecom, IMRglobal, Infonet Services, Internet Ventures, Intervu, IPC Comms, ITXC, IXnet, Keane, Mail.com, Media Matrix, Memory Corp., Metamor Worldwide, Metrocall, NCD, NetNation, NetSol International, Network-1 Security Solutions, Network Systems International, NorthPoint, Orckit Comms, PCD, Primus Telecom, Ramp Networks, RCN, RDM, Smith Micro, SoftNet Systems, SSE Telecom, StarMedia Network, Sterling Commerce, Storage Technology, Tangram Enterprise Solutions, TheStreet.com, Time Warner Telecom, US Interactive, VDC Comms, Walker Interactive Systems, Williams Comms and Winstar Comms.

Good numbers were recorded by Amstrad, Anixter International, Ansys, Celestica (back in the black), Cognizant Technology, Comdial, Dataram, ECI Telecom, ELSA AG, Embratel, Lernout & Haupsie, Loronix Information Systems, Matsushita, MER Telemanagement Solutions (back in the black), Mobilcom, Perot Systems, Rogers Corp., Rogers Wireless (back in the black), Sitel, Sterling Software, SunGard Thomson Multimedia SA, TTI Telecom International and Unigraphics Solutions.

Satisfactory results were reported by APAC Customer Services (back in the black), Applied Innovation, France Telecom, Interphase, MetaSolv Software, MCI WorldCom and ViaSat.

Mediocre returns came from Ciber, Complete Business Solutions, Cox Comms, CTG, Dell, Harbinger, Metro Information Services, Octel and Sykes Enterprises.

Very poor results came from ACT Teleconferencing (but back in the black), American Nortel Networks, Cedara Software, DataWave, Ecsoft Group, Embratel, InterDigital, LLC International (although first profit for six quarters), M-Wave, Metro One Telecomms, OAO Technology Solutions, On-Site Sourcing, Sanchez Computer Associates, Syntellect and TCI International (but back in the black).

Other financial news included profit warnings from Intelligent Environments, Merant and Segue Software; share split announcements from Allegiance Telecom, BroadVision, Cisco, Cognizant Technology, Group 1 Software, Lernout & Haupsie, Radiant Systems and Tollgrade Comms; and excellent IPOs from Flag Telecom, WebMethods and Witness Systems.

Stock movements

Locally

Bynx (+53.8%)
C-Tech (+25%)
Casey (+150%)
CCH (-29.3%)
Cyberhost (-27.3%)
Infowave (-21.1%)
Labat Africa (+33.3%)
NetActive (-36%)
Sethold (-31.9%)
Spicer (-53.7%)
Synergy (-33.8%)
ValueCom (-27.1%)
Y2Ktec (-44.4%)

Internationally

Anicom (+42.2%)
Aspect Development (+45.6%)
Asyst Technologies (-45.8%)
Bitstream (+38.2%)
Cabletron (+37.7%)
Clarus (+51.5%)
Computron (+45.4%)
Infosys (+76.3%)
Information Resource Engineering (+55.8%)
Lernout & Haupsie (+35.3%)
LTX (+38.9%)
Micro Component Technology (+39%)
Portal Software (+37.3%)
Robocom Systems International (+44.4%)
Scan-Optics (+58.3%)
SRS Labs (+42%)
Vitesse Semiconductor (+44.6%)

Final word

Five major vendors have come together and announced a $100 million investment to create a mobile Internet venture that is intended to deliver high-speed fixed and wireless voice and data services to business travellers worldwide. The companies involved are Cisco, CMGI, Compaq, Nokia and SoftNet Systems.

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