Telecoms firm KPN to buy Getronics

Dutch telecoms firm KPN is set to acquire IT services provider Getronics for €766m (£517m) in cash, in a move that has taken the IT services and telecoms arena by surprise.

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Dutch telecoms firm KPN is set to acquire IT services provider Getronics for €766m (£517m) in cash, in a move that has taken the IT services and telecoms arena by surprise.

KPN had previously made a bid for the company last year, but talks failed. Since rumours began of a renewed interest this year, it had been seen as an outside contender alongside rival telecoms giant BT, with system integrators such as EDS, CSC, HP and IBM seen as more likely contenders.

A recent bid by a US based firm reported to be integrator SystemsNet failed earlier in the month after talks were terminated.

KPN is keen to acquire Getronics for a number of reasons. Firstly, it has long wanted to mirror its rivals and convert itself into an ICT services firm rather than simply a traditional telecoms provider. By buying Getronics it will have workspace management and application service capabilities. KPN chief executive Ad Scheepbouwer said it made good sense: “More and more companies are converging their telecoms and IT requirements, sourcing all services from a single end-to-end vendor.”

But Getronics’ impressive list of clients is another part of the rationale behind the move. It counts the UK as one of its top market, and serves businesses including Barclays, Abbey, Alliance & Leicester, Shell, British Airways and Cable & Wireless, as well as the UK government.

KPN itself has a long list of high profile clients, including ING, Nederlandse Spoorwegen (Dutch Railways), ABN Amro and Rabobank, as well as many small and medium sized businesses. It hopes to expand the new services offering it obtains from Getronics to small to medium businesses, on top of the traditional large enterprise clients.

The two companies have signed a memorandum of understanding and expect to reach full agreement unless circumstances change in the market or a rival bid emerges, in which case KPN would be entitled to a break fee.

The news follows a difficult period for Getronics, which has sold off much of its central and eastern European business, suffered a financial scandal in Italy and entered into a loss of €54m last year on sales of €2.6bn.

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