Olivetti Sells Its Olsy Division

A $390 million agreement announced Monday will combine Olsy North America Inc. with Wang Laboratories Inc. into a single company better able to compete in the rapidly growing computer services industry.

Wang has been negotiating the purchase of Olsy’s worldwide operations with Olivetti S.p.A. of Ivrea, Italy, since October, said Massimo Gallotti, president of the North American operations based in Liberty Lake.

The plant’s 450 employees have been kept informed of developments as they occurred, he said, so there was no surprise when the deal was disclosed.

He said no changes are expected at the facility, where more than 1,000 workers once manufactured computer systems for the banking industry.

“I think that Olsy here in Spokane is a remarkable company,” Gallotti said.

When the transaction closes later this month, the merged companies will be renamed Wang Global. The new corporation will employ 20,000 worldwide and collect $3.6 billion in annual revenues.

Gallotti said Wang was the stronger of the two companies in North America, while Olsy had a more extensive service network in Europe and Asia.

“There is a huge geographic synergy,” he said.

Although Wang is far bigger in North America, Gallotti said, Olsy has an edge in network service, quick response, and banking software.

For example, company branch offices maintain ground stations for Hughes Electronics’ satellites.

The McDonald’s restaurant chain is another major customer, but Gallotti said banking systems contribute more than 70 percent of total income.

Wang, which is negotiating an expanded line of credit of as much as $500 million, may want to reinforce some of those areas, he said, adding that the company will continue to recruit software engineers for its Liberty Lake plant.

“The quality of the people we have is considered very, very high,” he said.

Terms of the agreement with Olivetti call for Wang to issue the Italian concern 8,750,000 shares of stock worth $244 million. The holding would make Olivetti the largest owner of Wang, ahead of Microsoft, with about 10 percent.

Other provisions lift the total package to $390 million.

If completed, the deal would be the latest in a series intended to reposition participants in the $124 billion technology services sector.

For Wang, it would also represent a giant step away from the company that flourished, then foundered, as a provider of minicomputers and proprietary software. The Massachusetts-based company emerged from bankruptcy in 1993.

Olivetti has also struggled with losses as it transforms itself from a computer and office-products firm into a telecommunications company.

In 1997, the company made money for the first time since 1990.

Olivetti had purchased ISC Systems Inc. of Spokane in 1989 and merged with Bunker Ramo Corp. of Connecticut, which also made computer systems for banks.

Employment in Spokane peaked at 1,100 in 1985, when the company manufactured its own computers, as well as the software to run on them. , DataTimes ILLUSTRATION: Photo

MEMO: This sidebar appeared with the story: IDENTITY CRISIS? Olsy North America is less than 22 years old, but has changed identities several times. 1977, founded as International Systems Corp. 1980, ISC Systems Corp. makes first public stock offering. 1984, moves into its headquarters at Liberty Lake. 1989, ISC purchased by The Olivetti Group and merged with another subsidiary, Connecticut-based Bunker Ramo Corp. The combined companies are renamed ISC/Bunker Ramo. 1993, ISC/Bunker Ramo changes name to Olivetti North America. 1997, Olivetti North America becomes Olsy North America. 1998, merger with Wang Laboratories Inc. would produce new firm, Wang Global.