Serco splashes £235m on ITNet
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Posted in Financial News, 16th December 2004 13:50 GMT
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Serco Group, the public sector services contractor, is to acquire ITNet, the computer services firm, for £235m in cash and shares. Serco is to pay 320p per share, a premium of 10.9 per cent on ITNET's closing price of 288.5p yesterday.
ITNet is probably best known for being sacked by the Cabinet Office this summer, after failing to meet several deadlines in the £83m web hosting project. That news sent its to shares crashing below 160p. In September this year, the company blamed the loss of the deal for its poor financial performance.
Serco, which runs services for prisons and the Royal Air Force, says the acquisition will position it well to take advantage of an increase in local authority IT outsourcing.
Kevin Beeston, Serco's chairman, described the companies as "a strong fit". His counterpart at ITNet, Oliver Whitehead, commented: "ITNET fits well with Serco and the enlarged group will have a strong presence in the business transformation market."
Serco will also spend £113m in cash ot buy US defence contractor, RCI. That deal will mean 12 per cent of Serco's business will be in the US. ®
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