May 4, 1999
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Wang Agrees to Be Bought
By Dutch Firm Getronics
An INTERACTIVE JOURNAL News Roundup
Wang Global, a onetime star in computer manufacturing that turned itself into a services company after emerging from bankruptcy protection, said early Tuesday it has agreed to be sold to Dutch information-services concern Getronics NV for about $2 billion.
Getronics launched a tender offer, which has been recommended by Wang Global's board, of $29.25 a share. Wang said the offer represents a premium of 39% over its average stock price in the last 30 trading days.
Wang's stock had been hovering in the low $20s before creeping up in the past week. It closed Monday at $25.50, up 43.75 cents, in Nasdaq Stock Market trading on more than twice the average daily volume.
Wang, formerly known as Wang Laboratories and based in the Boston suburb of Billerica, Mass., was once one of the world's major minicomputer makers. The company and its founder, Chinese immigrant An Wang, achieved fame for inventing the first electronic word processor. But Wang's success began waning in the late 1980s, when personal computers began to replace the bigger, more cumbersome minicomputers. The company, unable to adjust to the change in the market, filed for bankruptcy protection from creditors in 1992. Mr. Wang died in 1990.
Strengthening Its Position
Since emerging from bankruptcy reorganization in 1993 under the leadership of Joseph Tucci, chairman and chief executive, Wang began acquiring a string of companies in an attempt to establish itself as a major player in computer services. While it has been dwarfed in the U.S. by larger service companies such as International Business Machines Corp. and Compaq Computer Corp., Wang has focused on expanding its business overseas.
The purchase of Wang will give Getronics, a relatively small computer-services company, a stronger position in Europe and an important beachhead in the U.S., Latin America and Asia.
The combined company is expected to have annual revenues of about $5 billion, employ 33,000 people and have operations in more than 44 countries.
Wang, with about $3.5 billion in annual revenue, is already a major presence in Europe and Asia, specializing in networked-technology services. It has 20,000 employees, nearly 1,000 facilities, a direct presence in 44 countries and service agreements that extend the company into a total of 130 countries. Wang has partnership deals with Dell Computer Corp., Microsoft Corp. and Cisco Systems Inc., among others.
Cees Van Luijk, Getronics's chief executive, has been aggressively trying to expand the company from its origins as a computer reseller. The company has no U.S. presence and it has operations in Scandinavia and Spain but not much beyond that.
Mr. Tucci will join Getronics's five-member board.
Expanding Into U.S.
Getronics is expected to focus on expanding Wang's business in the U.S. and elsewhere, said people familiar with the matter. "This is not about cost cutting," said one person familiar with the deal.
One of Wang's biggest shareholders is Olivetti SpA, which owns about 18% of the company's stock. Olivetti has launched a hostile bid for Telecom Italia SpA, and the proceeds of any sale may help in that effort.
Wang's shares have languished over the past three years amid the boom in technology stocks. Despite a string of acquisitions, analysts and industry executives say Wang isn't generating enough internal growth for investors.
Separately, Wang posted a larger-than-expected net loss in the first quarter. The company's loss totaled $54.2 million, or $1.25 a share on a fully diluted basis, compared with a net loss of $44.9 million, or $1.22 a diluted share, in the year-earlier period.
Revenue surged 96% to $789 million. However, the latest results included restructuring charges and integration-related period costs totaling $51.5 million.
Analysts estimate net income for Wang, which recently switched to a calendar year from a fiscal year, will reach about $64.5 million, or $1.22 a share, in 1999.
-- Wall Street Journal staff reporters Steven Lipin and Jon G. Auerbach contributed to this article. |
