EMC Chomps Conchango for $84M

EMC has announced plans to buy U.K. consulting company Conchango for $84 million in Hopkinton's latest attempt to bolster its global services business.

The storage vendor has offered 23.1 pence (46 cents) per Conchango share, valuing the deal at around $84 million. The acquisition, which is expected to close sometime this month, also has the support of the Conchango board and some 80 percent of the company's shareholders.

EMC said that the acquisition is not expected to have a material impact on EMC revenue or EPS for 2008.

Conchango, which is a Microsoft partner, has some 300 consultants dotted around Europe and has also worked with some of the region's largest organizations, such as U.K. retail giant Marks & Spencer, the Bank of Ireland, and the BBC.

The London-based consulting specialist works with big-name European users on a wide variety of custom-built applications, ranging from e-commerce platforms, business intelligence projects, and even cashless payment cards.EMC's endgame is clearly to use these projects, many of which are extremely data intensive, as an opportunity to sell its hardware and software offerings.

In a statement, Howard Elias, president of EMC's global services division, outlined plans to use Conchango as a springboard for a European services assault.

"By combining Conchango with our own well-established Microsoft consultancy practice begun in the U.S., we will be well positioned to further expand our joint capabilities to more customers," he said.

Upon the close of the acquisition, Conchango will become the basis of EMC's European Microsoft consulting practice, which is part of the vendor's Consulting & Solutions Integration Services (CSIS) division.

Initial indications are that Conchango's workforce, including its management team, will now be swallowed up by EMC. Mike Altendorf and Richard Thwaite, the consulting firm's co-founders and joint managing directors, will lead EMC's European consulting practice.EMC's emphasis on services is also a reaction to the current economic climate, with a major question mark hanging over users' hardware and software spending. Increasingly, vendors such as EMC, HDS, and most notably, IBM, are throwing their weight behind services in an attempt to open up new revenue streams.

The Conchango deal is the latest in a string of recent acquisitions by EMC, which include Australian services specialist Infra and cloud computing vendor "Pi", which were both bought for undisclosed fees.

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