From Bloomberg about Perot Systems.
Perot Systems Shares Soar in 1st Day of Trading
Dallas, Feb. 2 (Bloomberg) -- Perot Systems Corp., the
computer services company founded by Texas billionaire and twice-
failed Presidential candidate Ross Perot, more than doubled in
its first day of trading, helped by demand for Internet stocks.
Shares of the Dallas-based company rose 24 3/4 to 40 3/4 on
the New York Stock Exchange. Perot Systems yesterday sold 6.5
million shares, a 7.7 percent stake in the company, raising $104
million.
Perot had already made a fortune when he started the company
in 1988 to run computer and information systems for other
businesses. That niche was the same one he exploited with
Electronic Data Systems Corp. which he created in the early 1960s
and sold to General Motors Corp. for $2.5 billion in 1984. Perot
Systems, a smaller version of EDS, doubled its profits in the
nine months ended Sept. 30, as companies sought help to manage
their computer networks and expand onto the Internet.
''The Internet component is certainly foremost in everyone's
mind,'' said David Menlow, president of Millburn, New Jersey-
based IPO Financial network ''But there are those of the old
school that see an opportunity similar to EDS, so this issue is
being buoyed up from many sides.'
Heavy demand for Perot Systems shares caused trading on the
New York Stock Exchange to halt briefly at 11:02 a.m., and then
at 11:38 a.m. for about 30 minutes.
Perot owns about 38 percent of the company, a stake worth
about $507 million at the sale price of $16. That stake had a
value of about $1.49 billion, and the company had a market value
of about $3.98 billion, at today's high of 47.
Growth Potential
As businesses move to make more use of the World Wide Web,
demand for Perot Systems' information technology skills is
expected to grow, Menlow said.
The information technology industry ''has good strong growth
potential for the next five years at a minimum,'' said Greg
Gieber, a senior analyst at Brown Brothers Harriman & Co.
Perot Systems estimated the market for information
technology services could grow to $306.6 billion in 2002 from
$177.8 billion in 1997, according to a filing with the U.S.
Securities and Exchange Commission.
Companies such as Perot Systems and EDS, as well as Computer
Sciences Corp. and Affiliated Computer Services Inc., which
design and build computer and information systems for other
companies, ''are like the Bechtels or Fluors of the digital
age,'' Gieber said.
UBS
Perot Systems said its business with UBS, mostly its Warburg
Dillon Read securities unit, accounted for about 25 percent of
its revenue in the nine months ended Sept. 30. Its second-largest
client, East Midlands Electricity, accounted for about 12
percent. About two-thirds of Perot Systems' business came from
its 10 largest customers.
''We have long-term contracts that allow you to have
repetitive revenues and profits month after month, quarter after
quarter, year after year, and then as you sell each new contract,
that adds to the growth of the company,'' Perot said in an
interview with Bloomberg Television.
Perot Systems earned $28.2 million in the nine months ended
Sept. 30, up from $13.6 million in the same period a year
earlier. Revenue in the nine months totaled $724.2 million, up 30
percent. EDS earned $601.2 million in the same nine-month period
on revenue of $12.5 billion.
UBS owned about 1 million non-voting shares prior to the
sale, and has options to buy another 6.4 million shares. Perot
has the right to terminate the company's royalty-free licenses of
the ''Perot'' and ''Perot Systems'' names.
Perot, 68, is chairman, president and chief executive
officer of Perot Systems. He said he expects to groom his
successor from the company's ranks.
Choosing a Successor
''We will always promote from within,'' Perot said. ''At
some point we will take the person that all of us feel is best
qualified, make that person executive vice-president, and give
that person more and more responsibility, and if he or she lives
up to our expectations, that's the way we'll create our next
president.''
Perot Systems said proceeds of the sale would be used for
general purposes, including ''business expansion.''
The company's stock trades under the symbol ''PER.'' In
addition to Morgan Stanley, underwriters for the sale include
Merrill Lynch & Co., Warburg Dillon Read LLC, Bear, Stearns &
Co., and Hambrecht & Quist LLC.
|
