Merger could shake up market of IT integrators
"In the increasingly competitive market, companies have to merge or specialize in narrowly defined niches," says Piotr Smólski, president of Ster-Projekt, which has been on a spending spree acquiring smaller companies. Ster-Projekt has also made overtures to Emax, another medium-sized listed integrator. Smólski declined, however, to comment on the revelations that a third firm, Spin, could also be added to the equation.
Should the reports prove to be true, the merged company would have market capitalization of around zł.1 billion, thus overtaking ComputerLand as the country's second-largest integrator, with the current market leader remaining Prokom. The Gdynia-based giant is also the largest shareholder of Softbank, which currently occupies third place on the list of the sector's largest firms. Should the Prokom-controlled Spin join the merger negotiations between the mid-sized players, it would increase the role of the market leader in the talks. Prokom is the largest shareholder in Ster-Projekt, which is leading the consolidation, and the addition of Spin could give it a major role in the merged company.
The rumors are widely seen as aimed at undermining the position of ComputerLand, which suffered several setbacks last year. Its acquisition plans were frustrated, as Ster-Projekt snapped up a firm specialized in systems for the energy industry. ComputerLand also lost all major public-sector contracts to Prokom-connected companies. Despite that, the results released last week proved far better than expected.
The company's revenues were up 25 percent, while a loss made in 2002 was turned into a profit of zł.5.9 million. ComputerLand President Tomasz Sielicki says the company expects further sales growth this year, as well as a double-digit increase in operational profits. CL looks well set to take on a new competitor, should one finally emerge from the rumored negotiations.
Not all companies on the market are contemplating consolidation, however. Kraków-based ComArch also released good results last week, showing 30 percent revenue growth. President Janusz Filipiak says the firm, "has too much capital," and would likely buy back bonds issued two years ago to the tune of zł.55 million.
"The bond issue was done to raise cash for acquisitions," Filipiak says, "But we found there are no attractive acquisition targets on the market." Filipiak says firms tend to be overpriced and criticizes competitors' past acquisitions as "messy".
ComArch plans to concentrate this year on foreign expansion, entering new markets in the former Soviet countries and seeking more contracts in Germany and the USA where it has been active for several years. Hence any plans to build a new large integrator connected to Prokom will leave it largely unaffected.
See the List pages 10-12.
Should the reports prove to be true, the merged company would have market capitalization of around zł.1 billion, thus overtaking ComputerLand as the country's second-largest integrator, with the current market leader remaining Prokom. The Gdynia-based giant is also the largest shareholder of Softbank, which currently occupies third place on the list of the sector's largest firms. Should the Prokom-controlled Spin join the merger negotiations between the mid-sized players, it would increase the role of the market leader in the talks. Prokom is the largest shareholder in Ster-Projekt, which is leading the consolidation, and the addition of Spin could give it a major role in the merged company.
The rumors are widely seen as aimed at undermining the position of ComputerLand, which suffered several setbacks last year. Its acquisition plans were frustrated, as Ster-Projekt snapped up a firm specialized in systems for the energy industry. ComputerLand also lost all major public-sector contracts to Prokom-connected companies. Despite that, the results released last week proved far better than expected.
The company's revenues were up 25 percent, while a loss made in 2002 was turned into a profit of zł.5.9 million. ComputerLand President Tomasz Sielicki says the company expects further sales growth this year, as well as a double-digit increase in operational profits. CL looks well set to take on a new competitor, should one finally emerge from the rumored negotiations.
Not all companies on the market are contemplating consolidation, however. Kraków-based ComArch also released good results last week, showing 30 percent revenue growth. President Janusz Filipiak says the firm, "has too much capital," and would likely buy back bonds issued two years ago to the tune of zł.55 million.
"The bond issue was done to raise cash for acquisitions," Filipiak says, "But we found there are no attractive acquisition targets on the market." Filipiak says firms tend to be overpriced and criticizes competitors' past acquisitions as "messy".
ComArch plans to concentrate this year on foreign expansion, entering new markets in the former Soviet countries and seeking more contracts in Germany and the USA where it has been active for several years. Hence any plans to build a new large integrator connected to Prokom will leave it largely unaffected.
See the List pages 10-12.
