COWEN & co on Compaq, the merger and the benefits-A summary
stephen: here is something really interesting from Cowen & Co about the CPQ/DEC merger and its benefits. I believe Cowen is an investment bank who specializes in Technology,Healthcare,Telecomm Cos etc.
For personal use only
Compaq's pending purchase acquisition of Digital Equipment (DEC: $61; Buy) will create a powerhouse enterprise computer systems player with pro-forma 1998 revenues of about $43 billion.
Conservatively, assuming just $500MM in annual cost/expense savings (relative to a combined COGS + operating expense base of $35-40 billion this year) and $200MM/annum goodwill amortization, we calculate the deal could be significantly accretive to 1999 EPS, which could be boosted to roundly $2.50, compared with our present pre-merger CPQ estimate of $2.25. According to the Cowen/Datamation User Survey, Digital and the top two pure x86 plays (Compaq and Dell) loom as the most obvious beneficiaries of NT in the enterprise; the Compaq and Digital merger, all else being equal, lifts Compaq's future enterprise systems mind-share among NT centric sites from 19% to over 30%, leapfrogging IBM and HP.ÿ
- Richard Chu, 2/17ÿ |
