Getronics, the Dutch IT services company, plans to acquire a 30% stake in HK-based ServiceOne, which is an existing business partner and claims an extensive presence in China's IT services market.
The surprising move was overshadowed by the announcement, also made today, that Getronics has received a formal expression of interest from a “US-based firm” that wants to buy the Dutch company.
Getronics has long been seen as a takeover target because of its sub-scale size in Europe's consolidating IT services industry and its troubled recent history. The loss-making company expanded rapidly in the past but has now had to sack staff and sell “suboptimal” operations outside the Netherlands following large losses and the discover of fraud in its Italian operations. Nevertheless, it remains a leader in the Dutch IT services market and, apparently, now has ambitions to also be a player in China.
The new HK-based entity, to be named ServiceOne Getronics, will seek to apply Getronics' well-known strengths in network and desktop outsourcing to the Chinese market.
This type of “infrastructure management” is hardly the sexiest part of outsourcing and it is relatively low-margin work. Nevertheless, Getronics is betting that this is the area of the Chinese IT services market that offers most potential, at least in the short-term, which could explain why the company, after retreating from other international markets has decided to make an exception as far as China is concerned.
ServiceOne was founded in 1998, and has over 600 technical & service personnel in 30 service centres across mainland China and HK.
The proposed transaction with ServiceOne also involves the transfer of 100% of Getronics' Infrastructure Services operations in HK, China and Macau into the new entity, giving it a combined payroll of 1,000 staff.