Comdisco purchase puts HP in services play

The proposed sale of Comdisco Inc.’s services arm to Hewlett-Packard Co. may see more HP services personnel in Canada, though specifics are not forthcoming at this early stage of the acquisition.

HP announced Monday it will buy Comdisco’s availability solutions (services arm) for US$610 million in cash. The deal will comprise the sale of assets for Comdisco’s U.S. operations and the purchase of stock of subsidiaries in Canada, the U.K. and France.

The remainder of Rosemont, Ill.-based Comdisco – its leasing and ventures business – has filed for relief under chapter 11 of the U.S. bankruptcy code. Chapter 11 protection does not extend to Comdisco’s businesses outside the U.S. and there is no word yet if these businesses will file for bankruptcy separately.

Comdisco has secured US$600 million in debtor in posession financing from a group of American banks including financial giants Chase Manhattan Bank, Heller Financial Inc. and Citibank. Comdisco’s surviving businesses after the HP takeover will “continue to run business as usual,” said Comdisco spokesperson Mary Moster, though the company is considering selling some of its leasing assets. Comdisco aims to exit Chapter 11 by the first calendar quarter of 2002.

The businesses may continue to run, but not on a full company roster. Two hundred positions will be eliminated, according to Moster, 30 of which are open and 170 are currently staffed. Approximately 110 of these layoffs will occur in Comdisco’s Chicago area offices. Moster did not know how many of the remaining 60 will be in Canada, but speculated they would be few.

Comdisco currently maintains offices in Toronto and Vancouver. How those offices will transform after the HP takeover – which is pending court approval since it will unfold under the auspices of chapter 11 rules – remains to be seen. If there is a swell in HP services in Canada as a result of the Comdisco move, one Winnipeg HP reseller says it could have an effect on HP’s channel partners.

“It’s not a huge surprise,” said Brian Beveridge, principle in Greenbridge Business Systems Corp, of the buyout. “It’s clear they’ve been looking for a service organization.

“It sets them up as more of a competitor (with us) than they are today,” he said. Where we see this impacting us, is they’re going to be competing with us for services business. They already are, but their (service) organization’s so small that we don’t typically get cut out of a lot of work.”

However, Beveridge said his company, situated in the prairies, may not have to concern itself too much regardless of the outcome. “HP’s not big here,” he explained. “Maybe there’s going to be one extra person out here, I don’t know.”

Hewlett Packard did not comment at press time.

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Jim Love, Chief Content Officer, IT World Canada

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