Bell Atlantic Corp.'s proposed acquisition of Sorbus Service, a computer repair firm, would give the regional telephone company a major role in one of the fastest growing segments of the computer industry, according to telecommunications and data processing industry experts.
With an estimated $125 million in annual revenue, the Frazer, Pa.-based Sorbus is the second-largest computer maintenance company in the country. California-based TRW Inc. is the nation's largest computer repair firm, with more than $180 million in sales.
The proposed price for Bell Atlantic's acquisition of Sorbus is $175 million in cash. Bell Atlantic's annual revenue approaches $8 billion.
The market for third-party computer maintenance services has climbed from roughly $370 million in 1978 to an expected $1 billion this year. Third-party repair work, which refers to maintenance by firms that did not supply the computer, now makes up nearly 10 percent of the total service market, according to International Data Corp., a Framingham, Mass.-based industry research firm. The market is expected to double to $2 billion by 1988.
Sorbus itself has enjoyed annual growth of more than 20 percent for 10 consecutive years and has branched out to repair machines ranging from IBM mainframes to personal computers. The company's sale comes as a result of significant strategic repositioning by Sorbus' parent, Management Assistance Inc.
After a bitter proxy battle, MAI agreed to sell off various divisions to satisfy shareholders. A computer-manufacturing division and Sorbus consequently were put on the block, with the investment banking firm of Lehmann Bros. handling the transactions.
"The value to shareholders would be maximized if we got a favorable price," said Robert W. Berend, MAI's general counsel. "A number of companies studied the purchase, and we had three other offers in addition to Bell Atlantic's."
"I think it's a marvelous acquisition and Sorbus is a super company," said Robert LaBlanc, a telecommunications venture capitalist who has worked with Bell Atlantic. "It gives Bell Atlantic a national service base, and it's not capital intensive."
A Bell Atlantic spokesman said it took two months to negotiate the deal.
The acquisition not only would give Bell Atlantic a service company to help maintain a variety of computers, but also would provide the regional phone company with another way of repairing computerized telephone switchboards at medium and large companies, the spokesman said. In addition, Bell Atlantic plans to use Sorbus to tap into the rapidly growing personal computer market.
However, the acquisition is contingent upon the approval of U.S. District Court Judge Harold H. Greene, who presided over the breakup of the Bell System. Last month, Greene laid down preliminary guidelines that sharply limit the businesses that the newly divested regional phone companies could enter. Greene criticized regional operating companies that wanted to stray too far from their basic role as telephone-service providers and enter new markets such as computer equipment manufacturing.
Bell Atlantic officials will meet with the Justice Department today for advice on how the company should proceed with the application and the kind of "line of business waiver" it should file, a spokesman said.
"We are optimistic about getting approval [from Judge Greene] ," the spokesman said.
Sorbus would become part of the Bell Atlantic Enterprises group, which includes Bell Atlanticom Systems, TriContinental Leasing Corp., a mobile phone service, A Beeper Company Associates, and Bell Atlantic Venture Services Inc.