Loss-making telecoms operator NTL made an £81m offer for networking systems integrator Workplace Technologies last week.
Workplace's board of directors has recommended that shareholders accept the offer, which represents a 57 per cent premium over the firm's share value on the day prior to the announcement, but is still significantly under its market value at the start of the year.
A spokesman for NTL said Workplace would augment the LAN and WAN design and implementation capability of the company's business systems unit, NTL Telecommunications.
Barclay Knapp, chief executive of NTL, said: "NTL is on its way to centre stage in the world of communications where broadband fibre optic and internet protocol networks are making revolutionary services possible."
He added: "Workplace has a skilled employee base and an excellent track record in providing data networking systems which, when combined with our network infrastructure, will increase the scope of the end-to-end services we can provide to our customers."
Keith Humphries, analyst at EuroLan Research, said he doubts Workplace would be totally subsumed by NTL but expects it will be run as a standalone systems integrator, with NTL having priority access to its resources.
Peter Sadler, marketing manager at Workplace Technologies, said he did not expect many redundancies: "We see this positively. NTL is buying people and skills, not capital. The information we are receiving indicates that our two cultures are very well matched."
This latest example of consolidation illustrates a trend towards independent networking resellers facing increasing competition from telcos with inhouse systems integration operations. NTL said the buy would increase its ability to provide end-to-end packages.
Workplace's results for the period ended 31 December 1998 showed turnover at £83m, up 26 per cent on the previous year, and profit of £3.3m, an increase of 79 per cent on the previous year.
The vendor recently won two high-profile contracts to build the network for the Bluewater shopping centre and the Millennium Dome.
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