One of the few things certain about the planned merger of UGS and Structural Dynamics Research Corp. (SDRC) under EDS is that the new entity will be a formidable competitor. Details about any operational changes and product transition plans will be worked out during the next several months.
Announced in late May, the deal proposes that EDS purchase SDRC for $950 million and buy back the 14% of UGS that is publicly held for $170 million. The rest of UGS is already privately held by EDS, which acquired the bulk of the company in 1991.
The result would be a product development solutions provider with more than 5,000 employees and 24,000 customers accounting for $1.6 billion worth of workstations and 40% of the world's digital three-dimensional (3-D) product information, according to Tony Affuso, president and chief executive officer of UGS. Affuso is slated to head up the new $1 billion entity, which would be one of five EDS business units.
The proposed merger "certainly is an interesting strategic move," says John Macarell, an analyst with research firm CIMdata Inc. UGS (formerly Unigraphics Solutions), SDRC, and EDS "have just created a very substantial player in the market," says Macarell.