[ISN] IBM to buy PricewaterhouseCoopers consulting arm

From: InfoSec News (isnat_private)
Date: Wed Jul 31 2002 - 00:07:52 PDT

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    By JIM KRANE, AP Technology Writer 
    NEW YORK (July 30, 2002 6:30 p.m. EDT) - Technology giant IBM Corp.  
    said Tuesday that it would purchase the consulting and technology
    services arm of PricewaterhouseCoopers for $3.5 billion in cash and
    The consulting arm, PwC Consulting, will join IBM's giant Global
    Services unit, which has overtaken the company's hardware division as
    its largest revenue earner.
    The acquisition, subject to approval of federal regulators and local
    PwC partners, will add some 30,000 new employees to the division that
    already counts about half of IBM's approximately 320,000 workers.
    In a prepared release, both companies said they expected the deal to
    be concluded around the end of the third quarter.
    PricewaterhouseCoopers, which had planned to shed PwC Consulting
    through an initial public offering, will no longer do so, said chief
    executive Samuel A. DiPiazza.
    "This transaction fulfills our commitment to fully separate PwC
    Consulting from PwC," DiPiazza said in a prepared statement.
    PwC Consulting, with estimated fiscal-year 2002 consulting revenues of
    $4.9 billion - excluding client reimbursables - will be combined with
    IBM Global Services' Business Innovation Services unit.
    With profits shrinking in sales of computer hardware and components,
    IBM was known to be looking to bolster its already large services
    The expanded Global Services unit will emphasize selling packages of
    "integrated business solutions," which bundle technology consulting
    alongside sales of hardware and software, and its integration into the
    company's business process.
    Some of IBM's large, multiyear outsourcing deals have involved the
    takeover of a company's entire information technology department,
    including hundreds of employees.
    The acquisition will allow IBM to strengthen its expertise in business
    processes, said Doug Elix, senior vice president with IBM Global
    "This is an exceptionally good fit - both strategically and
    culturally," Elix said.
    IBM shares closed at $71.79 each, up 61 cents, in Tuesday trading on
    the New York Stock Exchange.
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