Computer Associates (CA) has bought a US-based 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 15.5 million shares outstanding of the Jacksonville, Florida based company. CMSI?s 900 plus employees will join CA?s Global Professional Services division, bringing the number of consultants it employs to over 3,000 people.
?Our partnership with CMSI extends our continuing strategy of building GPS through highly focused acquisitions,? said CA president and chief operating officer, Sanjay Kumar, ?CMSI?s proven development methodologies and extensive experience with strategic reengineering make them an ideal addition to GPS? already formidable technology and business resources.?
CMSI focuses on an IT middle market of application development projects with Fortune 1000 companies. Clients include Coca Cola, Lockheed Aeronautical Systems and Merril Lynch, with project sizes ranging from $250,000 to $10 million.
?CMSI?s methodology is what makes it most attractive to CA,? said Jay Huff, European director of advanced technology for CA, ?It fits in well with our aims of customised application development.?
CMSI operates a national network of Systems Outsourcing Centers (SOC) in the US, which allow it to outsource 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.
Huff said GPS will look to implement a similar methodology across Europe, although he did not anticipate large numbers of CMSI staff being transferred across 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 said.
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.
CMSI had a turnover of $90.2 million for its fiscal year 1998, up 27 per cent on the previous year and it also recorded a 34 per cent raise in income to $12.4 million.
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