Acquisition of Fellesdata AS

Transcription

1 Acquisition of Fellesdata AS EDB and Fellesdata together represent a strong foundation for both domestic and international growth in computer operating services, as well as for forward-looking systems for the banking and finance market, and this will benefit customers, shareholders and employees 1

2 EDB S business model Consultancy services Product related consultancy services (systems integration and implementation) Software Banking & Finance Telecom. Public sector Trade & Industry E-commerce Internet WAP WAP Computer operating services (outsourcing, ASP) 2

3 Banking & Finance EDB s strategy for banking & finance: Product strategy: - specialise in retail banking - strategic alliances for corporate banking - open architecture and open platforms - modular approach to offer flexibility for customers - offer total systems or modules - offer expertise as a product in its own right. Business area will focus in particular on creating: - an international account product - self-service and payment services for both branch offices and the net - branch office systems with a work process orientation - Segment-of-one systems for both retail and corporate banking - further develop relationships with international partners 3

4 The EDB group in 3 year's time Group Norway Nordic Global Annual turnover NOK 6-8 bn. Operating margin 10% (before goodwill depreciation) Strong Norwegian base with a focus on selected segments (banking and finance, telecommunications and public sector administration) Leading edge expertise and products to form a basis for international expansion Leading Nordic player for applications, consultancy services and computer operating services Growth through acquisitions Global player for telecom and banking/finance applications (already established in Ireland, UK, France, Poland and the USA) Growth through acquisitions 4

5 Fellesdata / EDB - The merged operation Turnover of NOK 5 bn. in ,200 employees Nation-wide coverage in Norway - businesses in Europe and the USA Nordic market leader for banking and finance systems One of the largest and most efficient Nordic suppliers of computer operating services A major centre of IT expertise in Norway, with a focus on IT systems and services A driving force in the Norwegian IT industry 5

6 Strong joint platform for international expansion Creates critical size and scale in the home market. Brings together an internationally competitive product range Makes it easier to launch systems on the international market Frees up key expertise to concentrate on international development Creates an international dimension for computer operating services 6

7 Income and cost synergies Overlapping products and service expertise between Fellesdata and EDB Income Costs Combined resources in areas of business focus will create significant competitive advantage and improve the offer to customers A larger expertise base will create the foundation for increased investment in developing products with international potential Cost reductions through co-ordinating activities and increasing efficiency Infrastructure: co-ordinate Wan-activities Operational co-ordination: offers major savings Product development: combined operation will be capable of broader and deeper concentration on product development System development and maintenance: can be reduced over time with a larger portfolio Volume based savings on purchasing Joint administration can be more efficient 7

8 Integration of Fellesdata and EDB EDB Novit's operating services transfer to EDB Teamco Fellesdata's operating services transfer to EDB Teamco Activities in Fellesdata not related to banking/finance markets are separated out In-house software development activities of Fellesdata and EDB Novit are combined 8

9 Organisation EDB Business Partner BDC 38 % Ephorma 50 % EDB Fellesdata EDB Teamco EDB 4tel EDB Fundator EDB Dolphin EDB Infomedica EDB Novit EDB 4tel Ireland EDB Maxware EDB Intech Telesciences 9

10 Future development based on the EDB business model Consultancy services Product related consultancy services (systems integration and implementation) Software Banking & Finance Telecom. Public sector Trade & Industry E-commerce Internet WAP WAP Computer operating services (outsourcing, ASP) 10

11 Banking & Finance Allocation of roles/responsibilities in the group EDB Fellesdata (inc. Novit) industry responsibility domestically/internationally business and product development development and consulting account management for banking & finance customer support systems operations EDB Teamco technical infrastructure processing capacity operation of hardware, WAN and LAN systems supplier to EDB Fellesdata for banking & finance 11

12 Management and organisational structure Group model with banking & finance as a separate business area Current Managing Director of Fellesdata to be Managing Director of EDB Fellesdata (including Novit) Managing Director of EDB Fellesdata will be responsible for the process of integrating Fellesdata, Novit and Teamco Managing Director of EDB Fellesdata will join the Executive Management team as a Group Director responsible the banking & finance industry The Group Director responsible the banking & finance industry will also be responsible for the focus on international activities The Group Chief Executive Officer of EDB will become Chairman of the Board of EDB Fellesdata 12

13 Implications for management and employees Create a common identity Maintain the high level of expertise in both companies Regional expertise and focus Recruit, motivate and develop staff expertise Use the resources available to grow and expand No staff reductions implied by our offer Relocation to Skøyen for Fellesdata, and the Oslo based activities of Novit and Teamco 13

14 Implications for customers Will continue to deliver competitive products and services Ensures internationally competitive pricing Synergies => Greater efficiency => Added value for customers => Resources for expansion Will retain a decentralised organisation to ensure close relationships with customers 14

15 Consideration for the acquisition and financing Consideration for 100% of the shares of Fellesdata: NOK 2,000 million Financing arrangements NOK 450 million subordinated loan from current shareholders of Fellesdata. 5 year maturity, commercial terms and conditions. NOK 1,200 million share issue. Telenor will underwrite up to NOK 720 million NOK 200 million bank borrowings. NOK 150 million self financed from existing liquidity. 15

16 Conditions of EDB's offer EDB requires acceptances from 67% of shareholders (shares and votes) no later than 17 March 2000 EDB's offer is conditional on the transaction being approved as required by the relevant authorities 16

17 Profit and loss account for 1999 EDB Fellesdata Total Operating revenues Operating expenses EDBTDA Ordinary depreciation Operating profit before gwill. deprec Goodwill deprecation Operating profit after gwill. deprec Other items Net financial items Pre-tax profit Tax Profit after tax

18 Balance Sheet at 1 January 2000 EDB Fellesdata Merger Total Goodwill Other fixed assets Fixed assets 1, Liquid assets Non int. brng. current assets Current assets 1, Total assets 2, Equity 1, Minority interests 2-2 Non int. brng. Liabilities Int. brng. Liabilities Total liabilities 1, Liabilities and equity 2,

19 Accounting implications EFFECT ON PRE-TAX PROFITASSUMING FULL BENEFIT OF SYNERGIES : Deprecation of goodwill/over-value NOK -87 million Increase in interest expense ca. NOK -48 million Synergy benefits NOK million The profit contribution from FD's activities is additional to these figures 19

20 Accounting implications EFFECT OF THE ACQUSITION ON THE BALANCE SHEET : Goodwill arising from the acquisition NOK 1,510 million Over-value on properties NOK 261 million Change in liquid assets NOK -150 million Increase in interest-bearing debt NOK 650 million Increase in equity NOK 971 million The balance sheet effect of consolidating FD is additional to these figures 20