Dimension Data has begun what may become a bidding war with Compaq, making a competing offer to buy US e-business consulting and development company Proxicom for $448 million.
The offer to acquire all the shares of Proxicom for $7.50 per share represents a 30% premium to the offer Compaq tabled last month.
The offer values Proxicom equity at $448 million, with a transaction value of $376 million, taking into account cash of $72 million on the balance sheet.
Proxicom, which was founded as a systems integrator in 1991, has developed and built e-businesses for several blue-chip companies, including America Online, General Electric, General Motors, Merrill Lynch and Marriott International.
It is headquartered in Reston, Virginia, but also has offices in New York, Los Angeles, Chicago, San Francisco, Sausalito, Houston, Boston, London, Madrid, Munich, Paris and Rome.
Proxicom says it has completed more than 800 client engagements for Global 1000 companies and other large organisations. About 60% of clients return for new engagements, which it says is one of the best rates in the business.
Proxicom reported operating profit of $13.8 million on total revenue of $207.1 million for the 12 months to December 2000, compared with the previous year`s operating profit of $6.1 million on revenue of $82.7 million.
Dimension Data says it has conducted a thorough analysis of the US e-business industry and a detailed due diligence review of Proxicom, with the conclusion that Proxicom is an ideal fit to enhance its e-business integration model.
In accordance with the Compaq merger agreement, Proxicom has notified Compaq of its receipt of the Dimension Data proposal, and the Proxicom board has authorised negotiations with Dimension Data.
Under the terms of the Compaq agreement, Proxicom must notify Compaq if it decides that the Dimension Data offer is a superior proposal and determines to enter into a definitive transaction agreement with Dimension Data.
Compaq would have three business days to determine whether to match Dimension Data`s offer.
An analyst says the move is in line with Dimension Data`s stated intention to expand in the US, and the acquisition would certainly help the group`s growth in that market.
However, he questions the wisdom of entering a bidding war with Compaq, which will most likely make another offer, he adds.
Related stories:
Share