Focused ownership for Global sourcing
(Thomson Reuters ONE) -
(Oslo, 13 July 2011) EDB ErgoGroup ASA has decided on a renewed and intensified
strategy for Global sourcing as part of the company's overall strategy. The
first phase in this work will be to establish a focused ownership structure that
underpins a stable and cost-effective sourcing model aimed at serving the Nordic
market.
"EDB ErgoGroup is committed to operating a good sourcing model that involves
using expertise from both India and the Ukraine in areas that will help to
strengthen our competitiveness and improve our ability to deliver new
solutions to the market with short lead times. The companies that EDB
ErgoGroup has in these countries offer a range of expertise that we wish to
develop further, and it is advantageous to operate in two time zones. Our
strategy also makes it clear that we do not intend to focus on the local
market in the Ukraine ", comments Terje Mjøs, CEO of EDB ErgoGroup.
Background
The former EDB established its Global sourcing unit in 2007 with the acquisition
of 60.1% of the share capital of each of the two companies Infopulse and
Miratech in the Ukraine, as well as the acquisition of 51% of the share capital
of the Indian company Span Systems. Infopulse had built up a sizeable
international customer base over a number of years, developing its own expertise
in integrated sourcing models. EDB evaluated the acquisition of Infopulse and
Miratech on a combined basis, with a view to possibly merging the Ukrainian
companies to create a powerful unit using their combined resources.
The former ErgoGroup acquired a 51% shareholding in the Indian company Ion NOR
in 2008.
Focused ownership
EDB ErgoGroup has carried out a program of work over the first six months of
2011 to identify and analyse its sourcing requirements in the light of the
merged company's strategy and its requirements for access to expertise.
Based on this evaluation, EDB ErgoGroup has decided to increase its ownership
interest in the Ukrainian company Infopulse from 60.1% to 100%, while at the
same time agreeing contracts with key employees to retain their services.
Infopulse has been an important sourcing partner since the former EDB first
acquired its interest in 2007, and EDB ErgoGroup accordingly wishes to have a
closer association with the company.
Miratech's activities focus principally on the Ukrainian market. EDB ErgoGroup
has stated that it does not have any ambitions in the local Ukrainian market,
and for various reasons it would not be appropriate to merge Miratech and
Infopulse. One consequence of this is that EDB ErgoGroup will now consider
various alternatives for a sale of its shareholding in Miratech. The minority
shareholders in Miratech have notified EDB ErgoGroup that they wish to exercise
their put option (maximum USD 7 million) that was entered into in connection
with the agreement in 2007. Through the shareholder agreement, EDB ErgoGroup has
the possibility to sell the entire company together with the minority
shareholders, and therefore does not agree that the put options can be
exercised.
EDB ErgoGroup is considering moving to a closer integration of Span Systems. In
connection with the acquisition of 51% of the share capital of Span Systems in
2007 an option agreement (put-call) was entered into for the purchase of the
remaining 49% of the shares. EDB ErgoGroup has a call option in the third
quarter of 2011, while the other shareholders have a put option in the third
quarter of 2012. The value of the options in Span Systems is estimated to be USD
11 million.
Span Systems and Infopulse have reported good growth in revenue and earnings
since 2007, and EDB ErgoGroup is of the view that these companies are fairly
priced by comparison to similar companies.
Financial effects of the transactions related to the Ukrainian companies
EDB ErgoGroup will increase its ownership interest in Infopulse from 60.1% to
100%, and the transaction will involve a payment of USD 6 million in the third
quarter of 2011 and a payment in the order of USD 6 million in 2014.
As a result of the exit decision on the sale of Miratech, EDB ErgoGroup can no
longer consider the companies in the Ukraine on a combined basis for accounting
purposes, and this exposes the company to the risk of a write down of goodwill
in the order of NOK 20-30 million in the third quarter of 2011.
Contact names:
Terje Mjøs, CEO, EDB ErgoGroup. Tel: + 47 06500
Eli Giske, CFO, EDB ErgoGroup. Tel: +47 908 44 189
Geir Remman, SVP Corporate Communications, EDB ErgoGroup. Tel: + 47 970 55 017
About EDB ErgoGroup
EDB ErgoGroup ASA is one of the leading Nordic IT companies, with some 10,000
employees and annual turnover approaching NOK 13 billion. The company is listed
on the Oslo Stock Exchange and operates from headquarters in Oslo with major
activities in both the Norwegian and Swedish markets. In all, the company
operates from 135 offices in 16 countries around the world.
This information is subject to the disclosure requirements stipulated in §5-12
of the Norwegian Securities Trading Act.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: EDB ErgoGroup ASA via Thomson Reuters ONE
[HUG#1530590]
Unternehmensinformation / Kurzprofil:
Datum: 13.07.2011 - 06:01 Uhr
Sprache: Deutsch
News-ID 56348
Anzahl Zeichen: 6229
contact information:
Town:
Oslo
Kategorie:
Business News
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"Focused ownership for Global sourcing"
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