New York- and London-listed services company EDS has denied market rumours that its local division is considering acquiring Dimension Data plc. It has, however, confirmed it is looking at other possible local acquisitions.
"It is true to say that EDS is, financially, well placed to consider an acquisition as part of its local growth strategy. We have evaluated a number of possible candidates, but Dimension Data plc does not form a part of our plans at this stage. EDS will continue to seek joint business opportunities with Dimension Data," says Michael Minassian, chairman of EDS South Africa.
"EDS is primarily a services company and would not want to purchase a product resale-driven operation. The transition to services can be difficult, and is not necessarily something we want to tackle at this point," Minassian explains.
"EDS South Africa`s acquisition plans form part of a strategy to access expertise and market share in industries not yet tapped by its local operation. While we have global capabilities in sectors like government, and local expertise in manufacturing and financial services, a well-chosen acquisition can often do wonders for your expansion strategy."
EDS says some of its staff have encountered the rumour during their course of business on more than one occasion and the company felt it pertinent to put a stop to speculation before it grew.
The rumours follow hot on the heels of the DiData share price`s recent fall from grace on both the LSE and the JSE. To compound matters, Dimension Data owned a little under a half of the local division of EDS, selling its stake to the parent company two years ago, giving it a history with the company.
EDS currently has global revenue of about $19 billion. The stock has been trading around $63 on the NYSE and has a price to earnings ratio of 26.4
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