Merger mania continues

Lernout and Haupsie`s take-over of Dictaphone and VeriSign`s acquisition of Network Solutions dominated the international world of IT and telecommunications last week.

At home, the ABSA/AST-A deal was top news during a comparatively quiet week.

The acquisition by speech products specialist, Lernout and Haupsie, of Dictaphone, brings to an end the private company status of one of the oldest technology companies in the world.

Dictaphone was originally founded in the late 1800s following the invention of the telephone and the creation of Columbia Graphophone Company, which subsequently became the Dictaphone organisation, a word which is still trade-marked but has become synonymous with voice recording and processing.

Only last month, Siltek Telecoms became the distribution channel in this country for its products, and it will be interesting to see whether this channel also takes on the remainder of the vast range of speech-oriented products from its new parent.

The $21 billion acquisition of Network Solutions by VeriSign gives the latter access to the world`s largest domain name register, a global customer base of some 8.1 million net registrations, and a significant target for its server certification and associated services.

• good year-end numbers from Educor (and margins also higher);

• satisfactory year-end figures from Control Instruments (revenue down but profit up on last year`s equivalent numbers);

• mediocre year-end results from Acuity (revenue and income well down on prospectus forecast);

• good interims from Enterprise Outsourcing Holdings (but margins down); and

• the announcement of a joint venture between AST-A and ABSA (30%) to undertake the outsourcing of desktop and distributed systems or networks.

Additionally, it seems that Planit looks destined to have a significant board restructuring, following the significant disquiet being expressed among shareholders.

Mustek has announced that it is to list part of its stock on the Taiwan Stock Exchange, in order to raise capital for funding its research and development.

[Local]

[Cautionary]

[Calendar]

[Results]

Other local news included:

• the announcement of a restructuring of the boards at Educor and Y3K, the latter also including the disposal of several businesses;

• the creation of Canon SA;

• the setting-up of a joint Venture by Faritec and TCM, to sell IBM equipment and services into Africa; and

• the resignation of KTL`s CEO, Tony Leng.

• Baan started to salvage its financial predicament re its listing on the Amsterdam Stock Exchange, by raising $40 million in equity; and

• Deutsche Telekom, which unsuccessfully bid for US West and Qwest Comms, is also rumoured to have put in a bid for Cable & Wireless. It seems the German Telekom is determined to grow quickly through acquisition and increased bids for the two US firms may well be on the cards.

[International]

Other international news included:

• the appointments of Shelby Bonnie as CEO of CNET Networks, Harold Covert as CFO at Red Hat (was CFO at Adobe)Shaun Donnellan as CEO and president at Genicom, and Kent Foster as CEO of Ingram Micro (ex GTE);

• the resignations of James Gale, CFO at Genicom and Daniel Hesse, president of AT&T`s Wireless Unit (only weeks before an IPO from AT&T which could be the largest ever);

• a job cut announcement from GST Comms and Telstra; and

• the renaming of CNet to CNET Networks.

We saw excellent figures from Communications Systems, Control Corporation and e-SIM.

Losses came from American TeleSource, Ariel, CMGI, CommWorld, Elbit, Elbit Vision Systems, Engage Technologies, eOn Comms, General Magic, Inso, NaviSite, Nestor, Niku, Omnipoint, Optelecom, Teligent, Triton PCS Holdings, Via Net.Works, Vicinity and WorldQuest.

Good numbers were recorded by AremisSoft, Axon Group, Capri, Carreker-Antinori, National Computer Systems, National Semiconductor (back in the black), Ordina Beheer NV, Staffware, Systar, Telescan (back in the black), Teltronics and Ultimate Electronics.

Satisfactory figures were reported by Admiral, CT Comms, Morse Holdings, Numerex (back in the black) and QAD (back in the black).

Mediocre returns came from Geac, Parity Group and Telstra; while very poor results came from All American Semiconductor, Bridge Technology (but back in the black), Cognitronics, Comtech Telecomms, Mortice Kern (but back in the black), Nematron (but back in the black), Remec (but back in the black) and Top Image (but back in the black).

Other financial news included a profit warnings from NCD and share split announcements from BEA Systems, Breakaway Solutions, Covad Comms, CT Comms, Engage Technologies, Hummingbird Comms, LAM Research, NaviSite, PSDi, Qwest Comms, SAP and Vitria Technology.

There were also very successful IPOs from Crayfish (Internet services), InfineonAG (the semiconductor unit of Siemens), Net2000 Comms, OTG Software (data storage management software), RiverDeep (interactive learning systems) and Selectica (Internet selling system software). There was also an announcement that Genicom had applied for Chapter 11 protection.

Locally

Datacentrix (+22%)
Digicore (-20%)
I-Solution (-29.2%)
SecData (+53.3%)
Sethold (-22.5%)
Synergy (+46.7%)
TopTech (+27%)
UAM (-26.2%)
Y2Ktec (-25%)

Internationally

Adaptive Broadband (+60.8%)
All American Semiconductor (+62.9%)
California Micro Devices (+58.5%)
Descartes (+62.3%)
Input Software (+81.5%)
Interphase (+45.5%)
Maxtor (+40.9%)
Mercator (+42%)
Quest Software (+56.6%)
Robocom Systems (+138.3%)
SeaChange International (+46.9%)
Siliconix (+79.3%)
Software Spectrum (+46.4%)
SRS Labs (+43.1%)
Symix (+47%)

The Meta Group held its annual "METAmorphosis" in SA last week. The key message was that e-business and e-strategy is business and strategy; there is no difference any longer.

Additionally, the key in 70%+ of all e-business initiatives is customer relationship management, but the costs of a complete implementation are going to be higher than that for just enterprise resource planning systems such as Baan or SAP.