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In this Issue: > General Interest > Company News > Merger & Acquisition Activity > Primary Sources |
> GENERAL INTEREST
Economic activity in the U.S. service sector continued to post growth in May, and there was good news for employment, according to the Institute for Supply Management. The institute’s nonmanufacturing index’s May reading of 55.4 was unchanged from March and April. Index readings of more than 50 indicate expansion. However, the employment portion of the index posted a growth reading in May of 50.4 — the first growth reading in 28 months.
ACSESS reported that the Canadian staffing index fell three points in April to a reading of 79; however, the index is up from a reading of 70 in April 2009.
Economic growth is slowing, according to the Economic Cycle Research Institute’s weekly leading index of the U.S. economy. In the weekly period ending May 28, the weekly leading index level fell to 124.1 from the prior period’s reading of 125.6. The index’s growth rate fell to 0.4% from 5.1% in the prior period.
Consumer prices in May were up 1.4 per cent from a year earlier, mainly on higher energy prices according to Statistics Canada.
The latest estimates from the Statistical Office of the European Union (Eurostat) show that the number of persons employed in the 16 countries, which share the Euro as a common currency (EA16)* was stable in the first quarter of 2010 compared with the previous quarter.
The latest economic forecast published by the Confederation of British Industry (CBI) predicts that the UK economy will grow by +1.3% in 2010, up from +1% in its previous March forecast. The slight upward revision reflects the relative strength of the economy over recent months, with industrial production showing solid growth and overseas demand for UK-made goods strengthening, buoyed by the relative weakness of Sterling.
A sharp increase in temporary work shows that many European countries and the United States are pulling out of recession, according to the International Confederation of Private Employment Agencies (Ciett).
The Conference Board’s consumer confidence index fell in June for the first time in three months amid concerns over the labor market. The index now stands at a reading of 52.9 (1985=100), down from 62.7 in May. Consumers in the index’s survey saying business conditions are “good” fell to 8.0% in June from 9.7% in the previous month. In addition, consumers saying jobs are “hard to get” rose to 44.8% in June from 43.9% in May. And those saying jobs are “plentiful” fell to 4.3% from 4.6%.
> COMPANY NEWS
Hewlett-Packard’s enterprise services push to automate and modernize service delivery is why it’s planning to lay off 9,000 and rehire 6,000 with specialized skills in the next couple of years. The impact of layoffs in Canada is expected to be fairly modest.
Oracle is making further job cuts related to its acquisition of Sun Microsystems, primarily in Europe and Asia. Oracle said it will book up to US$825 million in additional charges for the acquisition this calendar year, including $550 million to $650 million primarily for severance payments. It didn’t say how many jobs it plans to cut.
An employment agency and its directors in Alberta, Canada, were charged on suspicion of collecting fees from two foreign workers to find jobs — a prohibited practice, Service Alberta announced. Platinum-Care.com Corp. and its directors allegedly charged two foreign workers a total of $5,200 to find healthcare jobs in Alberta, according to Service Alberta. The maximum penalty can be $100,000, up to two years in jail or both, according to Service Alberta.
> MERGER & ACQUISITION ACTIVITY
Savvis Inc. is paying $124.5 million in cash to purchase Toronto-based data centre hosting provider Fusepoint Inc. With the acquisition, the St. Louis-based cloud hosting provider will take over Fusepoint’s data centre facilities in Mississauga, Ont., Montreal and Vancouver. The company said it is following the advice of its large multinational customers, many of which have requested colocation and managed services in Canada. The acquisition of Fusepoint, a portfolio company of M/C Venture Partners, is expected to close early this summer. Half of Fusepoint’s business is concentrated in managed hosting, which should blend nicely with Savvis’ core business. The rest of Fusepoint is spilt between colocation (30%) and application services (20%).
HTC Corp. acquired a French company that makes software used by operators and phone makers to design mobile phone home screens. HTC did not disclose the purchase price for Abaxia, the Paris-based company whose software has been deployed on more than 25 million phones and 60 different handset models. Abaxia’s software lets an operator offer a consistent home screen across all handsets that it offers. That can be important as operators try to market specific services or applications. The software is also used by mobile phone makers to design home screens. Current Abaxia customers include Vodafone, Orange, Nokia, Motorola, Samsung and Sony Ericsson. In a brief statement, HTC did not say if it would continue to offer Abaxia products to competitive phone makers. While HTC started out as a contract phone maker, it is making more and more phones under its own brand. In addition, with Android, it has built its own user interface to distinguish its phones from others using the operating system. The Abaxia technology could contribute to those efforts. If HTC acquires important patents from Abaxia, it could also gain leverage in its ongoing legal battle with Apple. Earlier this year, Apple filed patent infringement suits against HTC, charging it in part with infringing patents related to the iPhone’s user interface. Additional patents could potentially help HTC negotiate during the dispute.
Electronic health record vendor Allscripts will buy Eclipsys in an all-stock transaction valued at approximately $1.3 billion. Allscripts, which offers clinical software, information, and connectivity solutions for physicians, and Eclipsys, a provider of solutions and services to hospitals and clinicians, said the merger will enable both companies’ clients to more effectively access the approximately $30 billion in federal American Recovery and Reinvestment Act funding for hospital and physician who adopt EHRs. Additionally, the combination of Allscripts and Eclipsys solutions will further establish Allscripts as a leader in driving “meaningful use,” the criteria that physicians and hospitals must satisfy in order to qualify for federal funding under ARRA. Driven in large part by the ARRA incentives, which begin in 2011, EHR adoption by physician practices is projected to grow. The government’s stated goal is to provide every American with an EHR by 2014. The merger will give Allscripts a client base of over 180,000 U.S. physicians, 1,500 hospitals, and nearly 10,000 nursing homes, hospices, home care, and other post-acute organizations. EHR adoption has also been accelerated by hospitals and health systems offering to support and subsidize the technology for affiliated physicians under the Stark Law safe harbor.
Check Point Software is expanding its security portfolio to include enterprise rights management with the purchase of Liquid Machines. The addition will add to Check Point’s data-security life-cycle strategy that takes it beyond its perimeter security roots to focus more on securing data over its lifespan based on its importance. This includes data loss prevention, encryption of data at rest and now protection of sensitive data from theft, alteration and other misuse. New Check Point products based on Liquid Machines technology will launch next year. No price was disclosed. Liquid Machines digital rights controls are based on Microsoft Active Directory Rights Management Services (RMS) in Windows Server. The company has built alliances with other security vendors such as McAfee and Symantec to support their data-loss-prevention products.
Hewlett-Packard is buying Linux-based quick-boot OS and client virtualization assets from Phoenix Technologies for US$12 million. HP will buy HyperSpace, a watered-down version of the Linux OS that allows users to surf the Web, view digital images or check e-mail just a few seconds after switching on a PC. The OS works on netbooks, laptops and desktops. Phoenix has offered HyperSpace as an option to Microsoft’s Windows OS, which could take 30 seconds or more to boot. The transaction is expected to close this month. HP will also buy the assets surrounding HyperCore, an embedded hypervisor that allows HyperSpace to run certain core services along with the Windows OS. This acquisition should add some bulk to HP’s already strong Linux assets.
IBM will purchase Coremetrics, a provider of Web analytics software. Terms of the deal were not disclosed. IBM will add Coremetrics into its portfolio of business analytics software and services. A privately held firm, the San Mateo, California-based Coremetrics offers a set of cloud analytics services that helps companies better market their brands. The service can help companies get e-mail pitches and personalized recommendations to the appropriate customers, and use customer analysis to place ads on the most-suitable networks and better manage the purchasing of search terms. Coremetrics customers include Bank of America, Holiday Inn, Office Depot, Petco, Victoria’s Secret and Virgin Atlantic Airways. Coremetrics employs about 230 people, who will be integrated into IBM.
Consona has purchased on-demand ERP (enterprise resource planning) vendor Compiere. Terms were not disclosed. Compiere is a both cloud-based and open-source, competing with the likes of OpenBravo. Its software mostly focuses on distribution, and will therefore complement Consona’s products for small to mid-sized discrete manufacturers. Consona plans to maintain and further develop Compiere’s products, which have some 130 customers, and will continue supporting the vendor’s open-source strategy.
Twitter, which recently announced its Promoted Tweets advertising program, has acquired the maker of a cloud-hosted Web analytics application. Smallthought Systems’ Trendly lets Web site owners dig deeper into the usage and traffic data than Google Analytics collects about their sites. The Smallthought staff has become part of Twitter’s analytics team, where they will integrate Trendly features and technology into Twitter’s existing systems, as well as help develop new products.
> PRIMARY SOURCES:
IT World Canada – http://www.itworldcanada.com
Ottawa Business Journal – http://www.ottawabusinessjournal.com
ZDNet – http://www.zdnet.com
Information Week – http://www.informationweek.com
