Dutch firm launches bid for Wang Global

A $2 billion bid by Dutch computer services company Getronics NV for Wang Global presents an opportunity to bring together two complementary companies with similar direction, the president of Wang Government Services Inc. said last week.

Getronics, which does three-quarters of its business in the Netherlands and Belgium, much of it in the government sector, last week launched the friendly offer to buy all outstanding shares of Wang Global for $29.95 per share. (Wang's closing price May 6 on the Nasdaq exchange was $28.75.) Wang Global's board recommended that shareholders accept the offer.

The acquisition will have no negative impact on Wang Global's position in the government market and will result in a larger organization with broader access to financial and human resources, said James Hogan, president of Wang Government Services.

No changes are planned in the management structure of Wang Government Services as a result of the deal, Hogan said, adding that he aims to ensure that there are "no missed beats" in customer service. "There's no downsizing. We are the government entity in the U.S., and we will continue to be. There's no change in the organization," Hogan said.

However, Getronics and Wang Global officials will have to comply with federal rules on foreign ownership in order to continue to compete for classified contracts. That might involve setting up a U.S.-based proxy company with a separate board. Company officials said they plan to begin meetings with government officials to work out those details.

Tom Browne, an analyst at Prudential Securities Inc., said there is plenty of precedence for foreign companies acquiring government contractors, so he does not expect Getronics and Wang Global to have any problems.

Getronics, whose main business is systems integration and consulting, had sought to buy an international services company for some time. It considered buying Olsy SpA, the services arm of the Italian company Olivetti SpA, but Wang Global beat it to the punch when it signed a deal to acquire Olsy last year.

Now the Olsy and Wang names might fade away as a result of the Getronics acquisition, observers said.Cees van Luijk, chief executive officer of Getronics, last week said he wanted to brand all services under the Getronics label but added that the company had not formed a strategy for moving from the Wang and Olsy brands.

Joe Tucci, Wang Global's chairman and chief executive officer, told an employee meeting that for the price Getronics intends to pay, it has the right to name the company, according to Eric Rocco, principal analyst for Dataquest. "We suspect those names are going away," Rocco said.

For Getronics, the transaction would mean an instant presence in two key areas were it has none—the U.S. and Far East markets.

In the U.S. market, Wang Global has been strong in the federal sector, with 30 years of experience providing IT service to government agencies. It holds a preferred service provider contract for all Dell Computer Corp. products used by agencies.

The acquisition would not affect that arrangement or partnerships Wang Government Services has with Microsoft Corp. and Cisco Systems Inc., Hogan said.

Wang also announced a first-quarter net loss of $57.7 million on revenue of $789 million. Restructuring and integration costs totaled $51.5 million. The results were below expectations, but not enough to push Wang Global to sell, Browne said.

-- IDG News Service contributed to this article.