Multi-process HRSourcing

EDS and Towers Perrin Create New Company for HR Outsourcing Services

New Company to Launch With $600 Million in Global Revenues, Serving More Than 400 Organizations and 33 Million Employees and Participants Worldwide
EDS Awarded $365 Million IT Outsourcing Contract to Support Towers Perrin’s Global Infrastructure

PLANO, Texas and STAMFORD, Conn., Jan. 18 /PRNewswire-FirstCall/ — EDS (NYSE: EDS – News) and Towers Perrin today announced an agreement to create a new company to deliver a comprehensive range of human resources (HR) outsourcing services to enterprises, HR departments, employees and retirees. In a separate agreement, Towers Perrin awarded EDS a 10-year, $365 million information technology (IT) outsourcing contract.

The newly created company will combine the technology and business process expertise of EDS — leveraging its global, scalable and secure Agile Enterprise Platform — with the benefits administration and HR domain expertise of Towers Perrin. This combination uniquely positions the new company to help clients optimize their investment in human resource processes and programs, and better align their HR agenda and delivery model with their business objectives.

“Our clients want us to be their HR advocates, listen to their challenges and deliver results that matter to the bottom line,” said EDS Chairman and CEO Mike Jordan. “This new company will lead the market with smart HR business processes that drive efficiencies and integrate with business intelligence.”

The new company emerges as a major player in the rapidly growing HR outsourcing space, with annual global revenues of about $600 million, about half contributed by each company, and more than 400 clients in the U.S., Canada, Europe, and Central and South America. In total, the new company will serve more than 33 million active and retired plan employees and participants.

EDS will own 85 percent of the new company, and Towers Perrin will own the remaining 15 percent. It will be led by Steve Bohannon, EDS’ vice president of HR services, and governed by a board of directors representing both companies. EDS will pay an estimated $420 million to Towers Perrin as a part of the agreement. The transaction is pending approval by Towers Perrin shareholders, and expected to close by the end of the first quarter of 2005.

The new entity combines Towers Perrin’s Administration Solutions business, which provides pension and health and welfare administration services, and EDS’ existing payroll and related HR outsourcing business. EDS will own the management of Towers Perrin Administration Solutions facilities, staff and intellectual property.

The new company’s portfolio extends well beyond these offerings to present a comprehensive set of HR outsourcing solutions across the core areas of benefits, payroll, compensation management, work force administration and relocation, recruitment and staffing, and work force development.

In addition, through a marketing alliance, Towers Perrin will provide consulting services to clients of the new company in plan design, communication, change management and other areas as appropriate, to help enhance the value and cost-effectiveness of the outsourced solutions. The combination of Towers Perrin’s HR consulting expertise with the new company’s outsourcing expertise offers clients a seamless and integrated way to meet their needs across the entire HR spectrum.

“In the current market, clients are increasingly buying on an integrated basis. They recognize they can better optimize their total investment in people and HR by connecting the design of their HR programs with the delivery of those programs,” said Towers Perrin Chairman and CEO Mark Mactas. “Through our alliance with the new company, clients can ensure their outsourcing solutions are shaped and informed by the right strategy, program design and implementation. Giving clients the ability to address these issues in tandem is core to the power of the new company and our alliance with the new company. Our organizations share this vision, as well as an enduring commitment to excellence in client service.”

The availability of this full range of services and technology positions the new entity as an industry leader with the capabilities to provide true end-to-end service delivery model, offering clients more tightly integrated HR processes, more efficient administration, improved access to HR data for business planning, and enhanced HR plan management.

Towers Perrin awards EDS a 10-year, $365 million global IT outsourcing contract

Towers Perrin awarded EDS a 10-year, $365 million information technology outsourcing contract to design, implement and operate a flexible, end-to-end IT solution to support Towers Perrin’s global network, desktop and hosting environment. Additionally, EDS will develop and manage selected applications for Towers Perrin.

“Aligning with EDS provides Towers Perrin with a flexible IT environment that will allow us to meet our current business requirements as well as future challenges,” said Tony Candito, Chief Information Officer of Towers Perrin. “EDS brings open, best-in-class technology, resources and innovation to manage complexity and rationalize costs within our IT program.”

About Towers Perrin

Towers Perrin is a global professional services firm that helps organizations around the world improve their performance through effective people, risk and financial management. Through its HR Services business, Towers Perrin provides global human resource consulting and administration services that help organizations effectively manage their investment in people. Areas of focus include employee benefits, compensation, communication, change management, employee research and the delivery of HR services. The firm’s other businesses are Reinsurance, which provides reinsurance intermediary services, and Tillinghast, which provides management and actuarial consulting to the financial services industry. Together, these businesses have over 8,000 employees and 78 offices in 76 cities in 24 countries. More information about HR Services is available at .

About EDS

EDS provides BPO services in key emerging areas including Human Resources, Finance and Accounting and Supply Management. EDS also has a long tradition of successfully providing a suite of solutions to both the public and private sectors with administrative, transaction and contact center outsourcing services.

EDS provides a broad portfolio of business and technology solutions to help its clients worldwide improve their business performance. EDS’ core portfolio comprises information-technology, applications and business process services, as well as information-technology transformation services. EDS’ A.T. Kearney subsidiary is one of the world’s leading high-value management consultancies. With more than $20 billion in annual revenue, EDS is ranked 87th on the Fortune 500. The company’s stock is traded on the New York and London stock exchanges. Learn more at .

The statements in this news release that are not historical statements, including statements regarding the amount of new contract values, are forward- looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond EDS’ control, which could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see EDS’ most recent Form 10-Q. EDS disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Tags: Multi-Processed HR, Sourcing

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