Fujitsu in a big push to acquire IT firms

With an eye on boosting its sales overseas, Fujitsu Ltd. is accelerating its drive to take over foreign information technology (IT) companies specializing in consultancy and services.

The maker of computers and software says it will be easier to buy out companies with solid customer bases overseas rather than trying to penetrate such markets on its own.

Fujitsu officials said the company intends to raise the percentage of overseas sales to overall sales to more than 40 percent in fiscal 2009 ending March 2010, from about 30 percent .

On Feb. 6, it announced the buyout of Intelec Geomatics Inc., a Canadian IT consulting company based in Montreal, as part of its push into the IT services business.

Fujitsu is expected to tap the know-how of Intelec Geomatics, known for its geomatics solutions, in developing software programs for local governments in Japan.

The move followed the acquisition of Promaintech Novaxa, another IT consulting company in Montreal, in October 2007.

Since May 2006, Fujitsu has taken over seven foreign IT companies. Four are based in Canada and the United States.

The acquisitions represent Fujitsu's attempt to bolster sales in North America and Latin America to 1 trillion yen in fiscal 2010, more than double the level in fiscal 2006.

While Fujitsu's hostile bid to take over GFI Informatique SA, a French IT services company, failed in August last year, it acquired Mandator AB, a Swedish IT services company, that October.

Fujitsu will continue its push to acquire more foreign companies, officials said.

Unlike sales of equipment, IT services require frequent discussions with clients to figure out what they need. This naturally varies according to local customs and culture.

"Fujitsu would not be accepted even if it tried to make inroads into foreign markets all of a sudden," said a senior official.

Fujitsu's buying spree comes as the company is trying to streamline its operations at home.

Earlier this year, it decided to spin off its chip division as a separate company.

According to projections by IDC, a U.S. market research firm, Japan's rate of investment growth in the IT industry will reach 2.1 percent in 2008, well below the levels of its rivals.

The figure for the United States is projected to be 4.4 percent and for Sweden, 5.9 percent. (IHT/Asahi: March 11,2008)