Schlumberger seeks sale of IT unit
By Astrid Wendlandt
Published: November 30 2003 16:24 | Last Updated: November 30 2003 16:24
Schlumberger, the world's largest provider of oil field services, has retained Deutsche Bank to find a buyer for one of its remaining information technology divisions.
The disposal of Schlumberger's disaster recovery business, said to be worth more than $200m, is part of the Franco-US company's efforts to draw a line under its acquisition of Sema, the IT services business for which it overpaid.
The bulk of Sema's operations, which include an eight-year contract with the Olympic Games, were sold to Atos Origin of France for €1.287bn ($1.544bn) in September, a sharp discount to the $5.2bn it had paid for the business two years ago.
Schlumberger, which acquired Sema at a time when corporations started to cut spending on IT, announced in December 2002 that it wished to focus on oil services and took a $2.99bn impairment charge on Sema's carrying value.
The disaster recovery business, inherited from Sema, provides global financial institutions and investment banks such as JP Morgan and Royal Bank of Scotland with back-up offices and IT systems in case of emergency, and stores data for them off-site.
It has offices in several European and Asian capitals as well as in Istanbul, where the Turkish headquarters of HSBC were destroyed by terrorist bombs last month.
Schlumberger has refused to provide financial details about the business but people close to the company say it is profitable and makes sales of about $140m a year.
The price paid for businesses in the disaster recovery sector has historically been between 1.5 times and 2.5 times annual sales.
SunGard is one of several companies considering a bid. The Pennsylvania-based provider of disaster recovery services, which has made a string of acquisitions in Europe over the past five years, believes Schlumberger's division would fit well geographically with its other operations.
SunGard snapped up loss-making UK-based Guardian IT last year for £167m in cash and outflanked Hewlett-Packard in acquiring Comdisco, a rival with a strong foothold in Europe, for $825m in 2001.
Hewlett-Packard, best known for making printers and computers, is looking at Schlumberger's disaster recovery division. It is keen to expand its services in order to boost margins. Bridgepoint Capital, the private equity firm, is also thinking of making an indicative bid for Schlumberger's business.
Other suitors could emerge over the next few weeks as the sale process is still at an early stage.
However, Andrew Gould, chairman and chief executive of Schlumberger, is said to be interested in concluding a deal quickly.
The disaster recovery division is one of several Sema businesses Atos did not wish to buy when it agreed to take on most of its IT services activities three months ago.
Schlumberger, SunGard and Bridgepoint declined to comment. |
