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Strategies & Market Trends : Pancho Villa's Short Analysis File -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (190)	12/29/1998 5:11:00 PM
From: Ram Seetharaman	Read Replies (1) \| Respond to of 287

FILE was up 23% today on good volume to $ 12.375. Does the following news have anything to do with this? Tuesday December 29, 3:15 pm Eastern Time INTERVIEW - Compuware seeks $1-$2 bln acquisition By Andrew Hay NEW YORK, Dec 29 (Reuters) - Business software and consulting company Compuware Corp. (Nasdaq:CPWR - news), in a bid to strengthen its services business, is searching for a major acquisition valued as high as $2 billion, President Joseph Nathan said Tuesday. Compuware is seeking a North American or European professional services company and hopes to nail down a deal before the end of its fiscal year on March 31, Nathan told Reuters in a telephone interview from Compuware's Farmington Hills, Mich., headquarters. Any deal would be paid for in Compuware shares and would only be agreed to if it added to the company's earnings, he said. The immediate goal would be to increase the company's head count, he said. ''Until we have 20,000 to 30,000 services people around the world, we're leaving money on the table,'' Nathan said. Compuware currently has around 6,500 services employees out of a total workforce of 10,000. Nathan declined to identify any potential takeover target. Behind Compuware's acquisition plans is its goal to become the No. 1 company in testing software and services for mainframe, Windows and Unix computer operating systems. The company has launched an aggressive advertising program to increase its visibility. ''What do you need most?'' ask Compuware ads featuring divers, mountaineers and others living life on the edge. Nathan said Compuware's North American services business needs greater geographic reach while its European operation needs employees. Compuware would like to take its European head count from around 1,000 to 4,000, he said. Compuware gets about 65 percent of its revenues from software contracts. The remaining 35 percent comes from staffing, consulting and other services. Any acquisition would not dramatically change that balance, the executive said. When Compuware offers software and services together, it beats out almost every competitor, Standard & Poor's analyst Scott Kessler said. When it only offer software, it wins only around 30 percent of contracts, he said. Compuware's powerful revenue growth has already pushed it past competitors like Novell Inc. (Nasdaq:NOVL - news), Adobe Systems Inc. (Nasdaq:ADBE - news) and Sybase Inc. (Nasdaq:SYBS - news). The company hopes to take on software heavyweights such as Computer Associates International Inc. (NYSE:CA - news), Oracle Corp. (Nasdaq:ORCL - news) and SAP AG (quote from Yahoo! UK & Ireland: SAPG.F). In addition to a services company, Nathan said Compuware is also seeking a software acquisition. Such a deal could happen as early as January -- or not until the end of 1999, he said. The price could range from a few million dollars to $1 billion. Nathan said Compuware was ''very comfortable'' with the 1999 First Call consensus earnings estimate of $1.67, and analysts' estimates of $1.7 billion in revenues for the year. He said the company hopes to beat First Call's 2000 earnings estimate of $2.23 per share and analysts' estimates of $2.3 billion in revenues. Around 12 percent of Compuware's third quarter earnings and revenues are expected to come from contracts to get computer systems ready for the Year 2000 date change and the switch to a single European currency. Nathan said around 80 percent of Compuware Year 2000 and euro contracts are with new customers. He said the company tries to use this work as a springboard into standard information technology outsourcing contracts. Compuware has already made this leap with companies like Ford Motor Co. (NYSE:F - news) and Bank One Corp. (NYSE:ONE - news). ''We've been working very hard to make sure that Year 2000 helps us but then when it's done we can still grow,'' he said. Nathan said Compuware can get to the $5 billion to $6 billion revenue range with its current business model. To go beyond that, and become a $20 billion company, it must explore packaged applications business or systems management and implementation, he said. ''Each of those requires an acquisition to work,'' Nathan said. ''Those are the sort of things we'll be looking at over the next 12 months or so.'' -------------------------------------------------------------------------------- More Quotes and News: Adobe Systems Inc (Nasdaq:ADBE - news) Bank One Corp (NYSE:ONE - news) Computer Associates International Inc (NYSE:CA - news) Compuware Corp (Nasdaq:CPWR - news) Ford Motor Co (NYSE:F - news) Novell Inc (Nasdaq:NOVL - news) Oracle Corp (Nasdaq:ORCL - news) Sybase Inc (Nasdaq:SYBS - news) Related News Categories: options, US Market News