EDS buys SDRC to bolster product life cycle management

IT services provider Electronic Data Systems Corp. announced yesterday that it plans to buy Structural Dynamics Research Corp. (SDRC) and one of its subsidiaries for about $1 billion in a move aimed at strengthening EDS's software and services for managing the development of products.

EDS is set to pay $25 per share for SDRC, or $950 million in cash, as well as purchasing the 14% of its Unigraphics Solutions (UGS) subsidiary that's now publicly held. The offering to UGS shareholders will be $27 per share, worth about $170 million, the companies said.

By combining with Milford, Ohio-based SDRC, EDS plans to provide software and services to digitally produce and share product planning, design, manufacturing and distribution information for collaboration over corporate networks and the Internet. The companies call that process "product life cycle management."

SDRC and UGS will be combined under the UGS name and will become a new business line under EDS, with Tony Affuso, president and CEO of UGS, serving as president of the new line. The UGS line is expected to surpass $1 billion in annual revenue, the companies said.

Plano, Texas-based EDS will gain 7,000 clients from the SDRC acquisition, 85% of which will be new to EDS, including Ford Motor Co., Honeywell International Inc. and Nokia Corp.

Both acquisitions are expected to close in the third quarter, pending foreign and U.S. regulatory clearance. EDS also plans to take a one-time charge for purchased in-process research and development in the closing quarter.

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