EDB has entered into an agreement to buy the Swedish IT consulting group Guide Konsult. The agreement will position EDB as a leading supplier of IT consulting and applications services in the Swedish market. Guide reported revenue of SEK 523 million for 2005, with an EBITA margin of 11%. EDB has agreed to pay SEK 657.5 million for the business acquired, which has 520 employees.
"This acquisition gives EDB a uniquely effective position in the Swedish market for IT consulting. Guide is well managed, generates good profitability and will give EDB a new dimension for its growth ambitions in Sweden", explains Endre Rangnes, CEO of EDB.
Following the acquisition, EDB will have 1,270 employees in Sweden and annual turnover in the order of SEK 1,500 million in this market.
EDB established IT consulting and applications services as a new area of strategic focus at the start of this year. This represents a further step in EDB's program to create a broader platform for the group in the Nordic IT services market. Together with the acquisitions of Avenir, Spring Consulting and STI, Guide will help to establish EDB as a significant Nordic player for IT consulting and applications services.
Taking into account the businesses acquired, around 40% of EDB's future turnover will come from Solutions and IT consulting, while IT operations will account for the balance of 60%.
Information on Guide
Guide is a leading supplier of IT consulting and applications services in Sweden. The group is a significant supplier for a number of major Nordic companies. The industrial focus of Guide's activities is on the car industry, pharmaceuticals, the public sector, the bank and finance industry and commerce.
Guide is currently represented in Gothenburg, Stockholm, Uppsala, Västerås, Malmö, Lidköping and Skövde. The head office is in Gothenburg. Guide has 520 employees, with the majority working in Gothenburg and Stockholm.
Guide reported revenue for 2005 of SEK 523 million, and had a 13% organic growth in revenue from 2004. EBITA margin strengthened from 8% in 2004 to 11% in 2005.
Information on the transaction
The agreement provides for EDB to purchase the entire share capital of Guide Konsult AB for SEK 657.5 million. The sellers are Nordic Capital Fond IV, which owns 95% of Guide, and employees of Guide who hold the remaining 5%. EDB will continue to operate Guide as a separate company as part of its IT consulting and applications services unit. Guide will continue to be run by its current managing director, Bo Jangvik, and other senior management will also continue in their current roles. The acquisition is expected to take place no later than 1 May 2006.
Seperately, Sparebanken Sogn og Fjordane has signed an agreement with EDB to purchase solutions and operating services for its banking activities. The contract runs to 1 July 2010 and represents new business volume for EDB of approximately NOK 50 million over this period.
Sparebanken Sogn og Fjordane has agreed to buy new software solutions and operating services from EDB. The software solutions are for use in the bank's branch offices and self-service channels, as well as for foreign exchange, lending and payment services. In addition, the bank will use core banking solutions and infrastructure from EDB.
"We are very pleased to announce this contract for Sparebanken Sogn og Fjordane. Over the last year EDB has supplied a range of first-class solutions to a number of important banks. In addition to Sparebanken Sogn og Fjordane, our contracts with Sparebanken Hedmark and Sparebanken SØR are good examples that the infrastructure and services EDB offers are well-suited to regional banks", comments Endre Rangnes, CEO of EDB.
"Sparebanken Sogn og Fjordane has good experience of EDB through its link with the company's systems over recent years. EDB offers a good range of services for our customers, and their banking solutions offer us reliable and high-quality operations", explains Arvid Andenæs, Managing Director of Sparebanken Sogn og Fjordane.