EDS has announced an agreement to purchase Structural Dynamics Research Corporation (SDRC), a developer of product data management solutions, for approximately $950 million in cash, or $25.00 a share.
Concurrent with the SDRC purchase, EDS will offer to buy the 14 percent of its Unigraphics Solutions (UGS) subsidiary that is publicly held. The offer to the shareholders of UGS contemplates a price of $27.00 a share or total cash of approximately about $170 million.
Both companies would be combined under the UGS name to become EDS’ fifth line of business. Tony Affuso, current UGS president and CEO, would become president of the new line of business.
The SDRC acquisition would bring EDS 7,000 clients, 85 percent of whom are new to EDS, and greatly expand relationships with companies including Ford, Mazda, Honeywell, Nissan and Nokia. Both transactions are expected to close on or about the end of the third quarter, pending applicable US and foreign regulatory clearance.
The SDRC acquisition and the UGS share purchase are expected to be slightly dilutive to EDS in Q4 2001 and for 2002. The company also expects to take a modest one-time charge for purchased in-process research and development in the quarter when the SDRC acquisition closes.
Under recently proposed accounting standards for business combinations the acquisition and share purchase would be neutral to EDS earnings in 2001 and accretive in 2002 and thereafter.