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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Elwood P. Dowd who wrote (18630)	3/1/1998 9:30:00 AM
From: Mohan Marette	Respond to of 97611

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