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Siemens acquires Entex to push into U.S. services market

The industrial giant extends its reach into the services market by picking up a U.S. company that handles computer support for Microsoft and others.

German industrial giant Siemens extended its reach into the worldwide services market today by picking up a U.S. company that handles computer support functions for Microsoft, Coca-Cola and others.

Siemens today said it would buy Entex Information Services, a Rye Brook, New York-based company that handles computer repair, network management and deployment, help desk staffing and other computer support functions.

The acquisition will bring approximately 5,000 technical employees in more than 50 locations to Siemens. Overall, this will give Siemens a services organization that produces revenue of around $2.2 billion annually.

The acquisition of Entex comes amid a general consolidation among computer support and sales companies. For years, a large segment of Entex's revenues came from selling PCs and servers to large corporate customers. Services gradually became a larger part of the business as margins on product declined. Last year, Compaq picked up computer assembly facilities and other elements of Inacom, once a competitor to Entex that has repositioned itself almost exclusively as a services company.

Geographically, the acquisition will come with very little overlap, a Siemens spokesman acknowledged. Currently, Siemens has approximately 8,000 employees in its own services division, but most of them are located in Europe. The company has a small services operation in the United States.

By contrast, nearly all of Entex's business comes from U.S. customers, he said. Clients include Microsoft, Intel, J.P. Morgan and Coca-Cola.

"The acquisition will enable us to provide borderless information technology services that offer customers the power and expertise they will need to leverage the benefits of U.S. developed e-business technologies on a worldwide basis," Paul Stodden, CEO of Siemens global IT service business, said in a prepared statement. "We are opening a global menu of possibilities to our North American and global customers by focusing on complex systems and networks use for mission-critical system and e-business solutions."

Siemens said it will pay $105 million for the company but added that the sale price will be reduced by around $24 million because of deductions for debt.

Earlier this week, Infineon, which had been the semiconductor manufacturing wing of Siemens, had one of the biggest IPOs in European history.