Ottawa, Canada-based systems integrator SHL Systemhouse Inc confirmed on Friday that it has acquired Computer Marketing Plc for a sum under UKP2m. Systemhouse says it will merge the Camberley, Surrey-based network integrator with its Manchester-based ComputerGroup Ltd subsidiary, which it acquired two years ago. Computer Marketing, best known as the exclusive UK distributor of Digital Communications Associates Inc’s personal computer-to-mainframe communication products, brings with it 120 employees, six locations and an annual turnover of around UKP30m. Its customers include British Gas, and National Provident Institution. The details of the merger of Computer Marketing with ComputerGroup have not been decided, says Systemhouse’s John Owens, but is likely there will be a handful of redundancies. Computer Marketing’s problems started 18 months ago, when it borrowed to buy some land, the interest payments for which crippled the company, draining all its cash reserves so that it finally called in an administrator last month (CI No 1,715). For Systemhouse, the deal forms part of a UK expansion drive. John Oltman, the new chairman and chief executive of Systemhouse, had come from Andersen Consulting where he had picked up an enthusiasm for Europe, in particular the UK. One of the ways Systemhouse has been growing in Europe has been through large contracts, says Owens, for example for the United Nations in Geneva and Italy. With the equivalent of $31m cash in the bank, though, Systemhouse has plenty of resources for expansion by acquisition. Although it has been ComputerGroup that has been the vehicle for Systemhouse’s growing presence in the UK, acquiring three personal computer resellers in the last couple of years, including Manchester-based Logitek Plc’s CSM Systems Plc, it is equally likely that further UK purchases, as with Computer Marketing, will be made directly by Systemhouse – the chairman of ComputerGroup, Iain Macdonald, also happens to be chairman of Systemhouse International. With the acquisition of ComputerGroup, Systemhouse gained 16 of the 24 ComputerLand Business Centres in the UK, which added to the 60 Canada Centres brought by Computer Innovations Distribution Inc, the Toronto-based firm which Systemhouse bought into three years ago. Systemhouse recently reported profits equivalent to $10m for the first nine months of 1991, against $25m losses, on turnover up 1% at $468m. Eighteen months ago, Systemhouse’s majority shareholder, Kinburn Technology, fell into serious financial difficulties, and its assets – including its Systemhouse stake – were seized by Kinburn’s parent company, BCE Inc, which took 25% of the company, and the banks which picked up the remaining 30% – the rest of the shares are publicly held. The Ottawa company was put up for sale in May 1990, but took itself off the market again in November, after a total lack of response. Says Systemhouse’s John Owens, the company will now remain in the hands of BCE and the banks until its share price improves.
