Hewlett-Packard (HP) is making a bid for U.K. IT services company Synstar in an effort to expand its service capabilities in Europe.
HP is making an offer worth approximately AU$421 million, or £1 per Synstar share, it said Monday. The offer represents a 28-percent premium over Synstar's closing stock price of £0.78 on Friday, HP said.
Synstar, based in Bracknell, England, offers business continuity, data management, networking and multivendor support services with operations in Belgium, France, Spain, Germany, Luxembourg, Ireland and the Netherlands.
The potential acquisition of Synstar would be an attractive opportunity for HP to add additional services expertise and capabilities in these markets company said. HP added that it is particularly keen on adding Synstar's business continuity and multivendor support services to its portfolio. According to Synstar's Web site, its multivendor services help companies deal with open architectures and the complexity of supporting numerous IT platforms as well as multiple vendor product lines.
HP already offers a range of IT services including business continuity and infrastructure services, hardware and software support and business applications. If its offer is accepted, HP said that it intends to retain Synstar's key management and operational staff.
Synstar representatives were not immediately available Monday to comment on the likelihood of its shareholders accepting the bid. However, all of the company's directors have already accepted the offer in respect to their shares, which guarantees HP at least a 0.3 percent interest in the company. Furthermore, HP has received nonbinding letters in support of its offer from certain institutional shareholders which would give HP an additional 30.2 percent stake.
Synstar has around 1,500 customers and reported a consolidated profit of £8.7 million on revenue of £223 million for the year ended September 30, 2003, HP said.
HP has scooped up a number of companies in recent months in an effort to fill out its portfolio. In May it announced that it was acquiring two IT service management firms, ManageOne and CEC Europe Service Management. Earlier in the year it also announced bids for management software companies Novadigm and Consera Software, saying that it intended to combine the companies' technology into its HP OpenView software.