Acquisition to Pay for Pure-Play ASP Corio
Corio expects to see payback within a year from its acquisition of Qwest CyberSolutions.Pure-play ASP Corio Inc. just bulked up to become what officials say is the largest of the pure-play ASPs in closing its acquisition of Qwest CyberSolutions LLC. The San Carlos, Calif.-based ASP, already considered a leading application services provider in some of its practice areas built around applications from Oracle Corp., PeopleSoft Inc., Siebel Systems Inc. and SAP AG, will gain between $25 million to $30 million in revenues for fiscal 2003, along with assets in four data centers, more than 30 new customers and about 85 employees. "This acquisition catapulted us firmly into a leadership position," declared John Ottman, executive vice president of worldwide markets for Corio in Wilton, Conn. "We will achieve payback within the first year. Itll help us achieve positive cash flow in the next fiscal year," he added.
The acquisition of Corios closest competitor, a significant event in the consolidation of the market, pits Corio squarely against large IT outsourcers, such as IBM Global Services and Electronic Data Systems Corp. in their ASP businesses. "Corio moved up market in the types of customers we are working with, and EDS and IBM in the last year started to emphasize their ASP businesses much more so than in the past. Going forward in the competitive landscape, well be dealing with those fellas," he said.