Idion, DataMirror face off

The HP/Compaq merger deal, which seems to have been approved (formal figures won`t be available for some time), dominated the internationalworld of IT and telecommunications last week.

At home, the hostile bid for Idion by Canadian-based DataMirror stole much of the local IT/telecoms headline space.

It is possible that the SA operation could be "dumped" and even Vision Systems sidelined, thus removing a competitor from the US market.

Paul Booth, MD, Global Research Partners

DataMirror already owns 16.4% of the stock of Idion, and this hostile bid is specifically oriented towards the acquisition of Vision Solutions, a direct competitor to DataMirror`s own product. It is possible that the SA operation could be "dumped" and even Vision Systems sidelined, thus removing a competitor from the US market. In its last full year ending 31 January 2002, DataMirror recorded a loss and its revenue was slightly down from the previous year. From the frying pan into the fire?

We saw full-year losses from CCI Holdings (10 month figures - was Y2Ktec), Control Instruments (but revenue well up) and iTouch (but revenue well up) and a half-year loss from Spicer (revenue also well down).

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

Local Cautionary Notices (see attachment).

Local Result Summaries (see attachment).

Local Major Event Summary (see attachment).

[Local]

Other local news included:

• the news that Rectron is restructuring;

• DNA`s announcement that it has entered into negotiations with Letsema Holdings whereby the latter will become the controlling shareholder in DNA Micor, a subsidiary of DNA Supply Chain Investments;

• the latest in the MGX/EC-Hold scenario, which could see proceedings being taken to the High Court;

• the abandonment by Datatec of its possible acquisition of Netherlands-based Landis Group;

• the appointment of Willie Scholtz as chairman of IQ Business Group;

• the resignation of Mike Rolfe, CEO of Unihold;

• the appointment of John Butler as executive chairman of Unihold; and

• the appointment of Axel Buhrmann as the new editor of Windows User Magazine.

• we saw the announcement that Network Associates plans to acquire all publicly held shares in its subsidiary McAfee.com (Network Associates already owns 75% of McAfee.com) in a merger move that would create a major player in the security market;

• the news that Hitachi and Mitsubishi are to combine the bulk of their chip-making operations in a move that would create the world`s largest manufacturer of microcontrollers and the third-largest maker of LSI chips;

• the news that Dictaphone is likely to emerge from Chapter 11 later this month as an independent company, focusing on addressing the healthcare market with its speech recognition system;

• the sell-off by BellSouth of its entire 9.42% stake in KPN NV; and

• the news that Arthur Andersen and KMPG have formally entered negotiations to merge their non-US businesses, potentially creating the world`s second largest professional services firm.

Additionally, look out for the listing on the LSE of UK-based Detica, an IT technology services provider, in a move that will see the first UK IT IPO for more than 12 months; and the buyer for France Telecom`s stake in Italy`s mobile operator, Wind.

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

[International]

Other international news included:

• the

  appointments

  of Jeffrey Berg as president of Comms Systems, Jeff Cramer as president of Anacomp, Stephen Fletcher as president and COO of Minolta-QMS, and Chris Rust as president and CEO of Mahi Networks; and

• job loss announcements

  from Xansa.

We saw excellent figures from VimpelCom (back in the black).

Good numbers were recorded by Global Payments, Lawson Software, NetNation Comms and Wegener (back in the black).

Satisfactory figures were posted by Image Systems, Progress Software and SI Technology.

Mediocre returns came from Comarco, ComputerLinks AG, Cotelligent (but back in the black), Elbit Vision Systems (back in the black-just), Electro Scientific Industries, Hutchison Whampoa, Jabil Circuit, ManTech International, Pacific Century CyberWorks (but back in the black), Palm (but back in the black), Resources Connection, Tech Data and Tibco Software (but back in the black).

Very poor results came from Analogic, Infinite Graphics and Paragon Technologies.

Losses were posted by 3Com, Aehr Test Systems, Affinity Internet Holdings, Apco Argentina, ATI Technologies, ATSI, Cognitronics, Conolog, Data Systems and Software, Datatec Systems, Digital Recorders, France Telecom, HEI, I-Sector, IDS Group Plc., IWO Holdings, Koor Industries, MCK Comms, Metatec, Micron Technology, National TechTeam, NSB Retail Systems, Orbit/FR, ParkerVision, Peerless Systems, ProTech Comms, Rare Medium Group, Red Hat, Redbus Interhouse, Sand Technology, Solectron, Spectrum Control, Storage Engine, T-Online, Versatel and Versus Technology.

Other financial news included a share split announcement from Applied Materials; profit warnings from Accenture (VC investments write-down), BCE, DDi, Eidos, InfoSpace, Marconi, Mercury Computer Systems, ONI Systems, Quantum and Xicor; and the filings for an IPOfrom Advantage Payroll Services and Computer Programs and Systems. Additionally, AremisSoft has filed for Chapter 11 bankruptcy protection.

Locally

Aqua Online (-27.8%)

Crux (-60%)

Dectronic (+66.7%)

EC-Hold (+28.7%)

Explorer (-20%)

Faritec (+19.3%)

FrontRange (+22.6%)

Idion (+59.6%)

Jasco (+20%)

Sethold (-20.8%)

Internationally

Comdisco (-31.2%)

Comino (+41.9%)

DA Consulting Group (+44.4%)

Enherent (+37.5%)

Frontline Comms (+29.4%)

Marconi (-54%)

NCD (+160%)

Orchestream (+71.9%)

Robocom Systems International (+88%)

Zen Research (+38.4%)

The HP/Compaq merger fight appears to be over at last (although it is still to be approved locally by the SA Competitions Board) but the real work has only just begun. Although the audited voting numbers are not yet available, work has already started on the enormous integration task. Some of the key questions to be answered globally with timescales, include:

• .         How many people will go?

• .         What branding will be used?

• .         What structures will be put in place and who will head the new integrated units?

• .         What locations/offices will be sacrificed?

• .         What manufacturing locations will continue?

• .         What sales and distribution model will be adopted?

• .         What fiscal year will be adopted?

• .         When will the provisions/write-offs be taken into the financial figures?

And so it goes on... And we still have to wait for the local implications, which I suspect will be equally difficult to put into place.

My next column will appear on Monday, 8 April, following the Easter holiday period.