Monday January 10, 3:57 pm Eastern Time
Textron to buy stake, partner with Safeguard
(Adds Textron CEO interview, updates stock price, adds background, paras 5-12.)
PROVIDENCE, R.I., Jan 10 (Reuters) - Multi-industry, conglomerate Textron Inc. (NYSE:TXT - news) on Monday said it will invest $100 million in business-to-business electronic commerce firm Safeguard Scientifics (NYSE:SFE - news).
Under terms of the deal, Textron and Safeguard Scientifics will form an alliance under which Textron will work with Safeguard's partner companies, including Align and Cambridge Technology Partners (NasdaqNM:CATP - news), to implement e-commerce activities, including procurement, asset management, human resources and sales strategies, Textron said.
Textron, which owns Cessna Aircraft and Bell Helicopter, among other businesses, will buy 727,273 shares in Safeguard at $137.50 per share, the companies said.
Based in Wayne, Pennsylvania, Safeguard Scientifics has partnerships and equity stakes in 250 firms in the so-called ''b-to-b'' Internet segment.
Textron Chairman and Chief Executive Lewis Campbell said in an interview that while the company's automotive parts business has embraced the e-commerce revolution, other Textron businesses ''have not made that move yet.''
He said General Electric (NYSE:GE - news) leads the pack among big multi-industrial firms in using the Internet as a business tool. Textron hopes its deal with Safeguard enables it to leapfrog its competitors, Campbell said.
''We certainly are not ahead of the pack, and that's why we made this step,'' Campbell said.
Competitors who fail to take similar steps will be at a disadvantage, Campbell added.
''I think that companies that are not as far onto the Internet as they need to be in the next 12 months are going to find themselves severely behind the power curve,'' he said.
Campbell could not quantify the advantage of linking with Safeguard.
Shares in Textron rose $1 1/16 to $73 13/16, while shares in Safeguard Scientifics were down $1-3/8 to 164.00.
In November, automotive giants Ford Motor Co (NYSE:F - news) and General Motors Corp. (NYSE:GM - news) announced separate e-commerce plans to link suppliers, dealers and other businesses. Ford said its e-commerce joint venture with Oracle Corp. (NasdaqNM:ORCL - news) could save it billions of dollars.
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