http://www.nandotimes.com/technology/story/483363p-3859800c.html
By JIM KRANE, AP Technology Writer
NEW YORK (July 30, 2002 6:30 p.m. EDT) - Technology giant IBM Corp.
said Tuesday that it would purchase the consulting and technology
services arm of PricewaterhouseCoopers for $3.5 billion in cash and
stock.
The consulting arm, PwC Consulting, will join IBM's giant Global
Services unit, which has overtaken the company's hardware division as
its largest revenue earner.
The acquisition, subject to approval of federal regulators and local
PwC partners, will add some 30,000 new employees to the division that
already counts about half of IBM's approximately 320,000 workers.
In a prepared release, both companies said they expected the deal to
be concluded around the end of the third quarter.
PricewaterhouseCoopers, which had planned to shed PwC Consulting
through an initial public offering, will no longer do so, said chief
executive Samuel A. DiPiazza.
"This transaction fulfills our commitment to fully separate PwC
Consulting from PwC," DiPiazza said in a prepared statement.
PwC Consulting, with estimated fiscal-year 2002 consulting revenues of
$4.9 billion - excluding client reimbursables - will be combined with
IBM Global Services' Business Innovation Services unit.
With profits shrinking in sales of computer hardware and components,
IBM was known to be looking to bolster its already large services
business.
The expanded Global Services unit will emphasize selling packages of
"integrated business solutions," which bundle technology consulting
alongside sales of hardware and software, and its integration into the
company's business process.
Some of IBM's large, multiyear outsourcing deals have involved the
takeover of a company's entire information technology department,
including hundreds of employees.
The acquisition will allow IBM to strengthen its expertise in business
processes, said Doug Elix, senior vice president with IBM Global
Services
"This is an exceptionally good fit - both strategically and
culturally," Elix said.
IBM shares closed at $71.79 each, up 61 cents, in Tuesday trading on
the New York Stock Exchange.
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Received on Jul 31 2002
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