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IBM Will Buy PacTel Unit, Sources Say

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From Reuters

In a rare acquisition, International Business Machines Corp. will buy PacTel Spectrum Services, a unit of San Francisco-based Pacific Telesis Group, industry sources said Tuesday.

Both Armonk, N.Y.-based IBM and Pacific Telesis declined to comment. But Pacific Telesis spokeswoman Diane Olberg said the regional Bell telephone company planned to make an announcement about the unit later this week.

PacTel Spectrum provides equipment and services used to manage computer and telephone networks, one of the fastest-growing segments of the telecommunications industry.

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IBM has said that network management is crucial to its overall strategy, as have rivals American Telephone & Telegraph, Digital Equipment and Unisys.

The price tag for PacTel Spectrum could not be learned. But analysts said it would be small for IBM, which had sales of more than $54 billion last year, and Pacific Telesis, whose 1987 sales topped $9.1 billion.

It would be IBM’s first acquisition since it bought Rolm Corp. in 1984 for $1.29 billion and only its second since 1964.

Follows Retrenchment

The deal would mark a setback for Pacific Telesis, one of the seven regional phone companies spun off by AT&T; in 1984. The company formed PacTel Spectrum 2 1/2 years ago in an effort to capitalize on the rapid proliferation of private voice and data networks used by corporations, government agencies and universities.

Despite an investment of about $30 million, the unit, hampered in part by regulatory restrictions, has not signed up as many customers as Pacific Telesis had hoped, analysts said.

It follows a retrenchment late last year by another Pacific Telesis unit, PacTel Communications. That operation, which sells computers and phone systems, reorganized to focus on major business customers and closed 15 of its 24 PacTel InfoSystems stores. The move cost the company $45 million after taxes.

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