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VALLEY AND VENTURA COUNTY | VENTURA COUNTY REVIEW /
LEO SMITH

Electroservice Labs Signs Deal With Spanish Firm

March 24, 1998|LEO SMITH | SPECIAL TO THE TIMES

John Morgan is betting that a one-stop business philosophy will strike a chord not only with shoppers but also with the IBMs and Hewlett-Packards of the world.

So Morgan, president and chief executive of Ventura-based Electroservice Laboratories, has allied his company with a European firm that offers complementary services.

Since its founding in 1985, Electroservice has repaired and remanufactured mass storage equipment--such as tape drives, disk drives and CD-ROM drives--for the computer industry. The company now has formed a partnership with Compuspar, S.A. of Barcelona, Spain, which would add printer repairs to its list of services.

Terms of the deal between the two private firms were not disclosed. However, Morgan said he anticipates a transfer of stock down the road.

"What we're finding is that markets are really demanding consolidation from the repair industry," Morgan said. "The larger players are gravitating toward dealing with fewer, but more substantial facilities."

The joint venture, intended to increase the marketability of both partners, also should allow Electroservice to dramatically increase its international presence.

Electroservice, which includes IBM and Hewlett-Packard among its list of clients and has a division specifically assigned to the latter, does very limited foreign business. Compuspar is predominantly an overseas operation.

"They have a half-dozen operations throughout Europe and a couple in South America and one in Florida," Morgan said.

"Through our customers, we will solicit printer support services for them and they'll do the same for us in storage products," he said. "Long term, when our business expands, we'll set up repair operations in these other locations."

Electroservice already has set up shop in Florida and plans a dozen new locations over the next several years.

The operations will piggyback on Compuspar's nine international operations--including sites in Germany, Madrid, Barcelona, Portugal and the United Kingdom, with additional locations planned for Mexico City and Brazil.

"It will be kind of gradual," Morgan said. "The Florida facility gives us an East Coast presence, and we'll open in the U.K. within the next three months, just outside of London. We may open one every several months. Whenever the fit seems right we'll move into an area."

Prior to forming the partnership, Electroservice had handled few printer repair jobs, Morgan said. The additional clients, he said, ultimately could increase business by up to 500%.

Electroservice employs about 150 workers in its Ventura facility and an additional 200 in its site in Lincoln, in Northern California. Additional shops abroad, he said, will staff about 25 people, including management, when they become fully operational.

"Some of the customers in these other regions weren't repairing their products and were buying new so there would be a big cost reduction for them, or they may have been repairing but were shipping parts all over the world," Morgan said. "Big customers want to deal with sizable companies that offer global support--we've found over the last few years that's where the shift is, and we've [prepared] ourselves to be in that position."

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