CA plugs gap after CSC merger failure
Services Fourth acquisition for vendor sees it swallow up CMSI.
Computer Associates (CA) has bought US services company, Computer Management Sciences (CMSI), for $435 million as part of its strategy to develop customised systems for its customers.
The deal will see CA pay $28 a share for all of the Jacksonville, Florida firm's 15.5 million outstanding shares. CMSI's 900-plus employees will join CA's Global Professional Services division, bringing the number of consultants it employs to more than 3,000.
Sanjay Kumar, president and chief operating officer of CA, said: 'This partnership extends our continuing strategy of building GPS through highly focused acquisitions. CMSI's proven development methodologies and extensive experience with strategic re-engineering make it an ideal addition to GPS' already formidable technology and business resources.'
CMSI is the fourth services company CA has bought since the high-profile public failure of its $8.5 billion hostile bid for services giant Computer Sciences Corporation (CSC) last year. Since then, it has stressed it will focus on smaller, strategic acquisitions.
The company has a turnover of $90.2 million for its 1998 fiscal year - up 27 per cent on the previous year - and it also recorded a 34 per cent rise in income, to $12.4 million.
CMSI operates a national network of Systems Outsourcing Centers (SOC) in the US, through which it outsources the development of customers' applications.
The SOCs contain hardware and software to simulate development environments, including reusable code and components, making it easier to develop applications.
Jay Huff, European director of advanced technology at CA, said GPS will look to implement a similar methodology across Europe, although he did not anticipate large numbers of CMSI staff being transferred from the US.
'The other thing that's attractive about CMSI is that it has good profit margins for the industry,' Huff said. This was due to cost savings contained in its methodology, he added.