Schlumberger Limited (NYSE:SLB) and Convergent Group Corporation (NASDAQ:CVGP) have announced the execution of a definitive merger agreement whereby Schlumberger has agreed to acquire a majority interest in Convergent Group for cash consideration of $8.00 per share, for approximately $276 million. The transaction will be structured as a tender offer to be commenced within ten business days from October 13, 2000 for any and all outstanding shares of Convergent Group common stock, followed by a merger cashing out any untendered shares at the same $8.00 per share price.
The executive management of Convergent Group and an affiliate of Convergent Group's largest client Cinergy Corp. (NYSE:CIN), representing approximately 28% of the Convergent Group outstanding shares will become stockholders of the new entity, Convergent Holding Corporation. Glenn E. Montgomery will remain President and Chief Executive Officer of Convergent Group, which will continue to operate as a separate company. The merger agreement and the tender offer were negotiated and approved by a committee of independent directors of Convergent Group. Before goodwill amortization the effect on Schlumberger 2001 operating income is expected to be slightly accretive. The anticipated effect on 2001 net income and earnings per share is not material.
Convergent Group is a leading builder of digital enterprises, providing business consulting, software engineering, system integration and project management services that enable utility and local government clients to increase operational efficiencies, improve customer service and implement Internet-based business systems.
"Convergent Group's unique professional services offering and knowledge of the utility industry is a natural fit complementing the Schlumberger value-added solution approach to business in the utility sector," said Clermont Matton, executive vice president of Schlumberger Resource Management Services. "Convergent Group's expertise in system integration, combined with CellNet's fixed-network and data management technologies, positions Schlumberger as a leading provider of business solutions to the increasingly competitive utility sector."
"We are very excited to be joining forces with Schlumberger," said Glenn E. Montgomery, chief executive officer of Convergent Group. "The combined services portfolio of Convergent Group and Schlumberger will allow our companies to bring a new level of service and technology to the marketplace and significantly enhance our ability to expand Convergent Group's presence in the global digital economy."
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