The agreement provides for EDB to purchase IBM's outsourcing activities for Local Government Sector and medium-size companies, IBM's Infobank, EDI services, an operations centre at Hamar and IBM's ownership interest in Kommunedata AL. This business has an annual turnover of approximately NOK 500 million, and includes services for some 300 municipalities and major public registries as well as for 45 of IBM's customers in the Distribution and Industry sectors. The business to be transferred from IBM to EDB has approximately 265 employees.

 

"Acquiring this business from IBM represents a three-fold increase in our turnover from the Public Sector, and makes EDB a fully fledged supplier to this market segment. In addition, taking on 45 new customers in the Distribution and Industry sectors will strengthen our position and turnover in these segments significantly", explains Endre Rangnes, CEO of EDB. "The expertise that this transaction will bring to EDB will strengthen our competitive position in a challenging market", adds Endre Rangnes.

 

"The sale of our Norwegian operations business for these public sector and SME customers reflects IBM's global strategy to consolidate our operations to fewer and larger units. We are implementing this consolidation throughout Europe, and in Norway we have found a good solution with a major local player to ensure reliable and secure operations. Through our close collaboration with EDB, we believe that this is the best solution possible for our customers and employees in this area", comments Jens Munch-Hansen, Managing Director of IBM Nordic. "IBM will continue to offer outsourcing on a case-by-case basis to the major companies and organisations on which we now focus, including Norwegian customers", adds Jens Munch-Hansen.

 

The agreement involves EDB taking over this business from IBM for a total price of NOK 468 million, of which NOK 60-70 million relates to business premises and approximately NOK 20 million to other fixed assets. The business to be acquired by EDB generates annual turnover of approximately NOK 500 million, and is made up of contracts for periods of up to 5 years. In terms of its current structure, EDB will take all of this business into its IT Operations business area. However a different allocation will be applied when EDB launches its new organisational structure starting in 2005, and the company will provide details of this at a later date.

 

The contract is conditional on gaining the necessary approvals in respect of the Competition Act and other normal terms.

 

The purchase price will be paid when the business is transferred, which is expected to take place on 31 December 2004 if the approvals required are granted normally. The acquisition will be financed from EDB's cash holdings and existing credit facilities.