The company is examining the books of four possible takeover candidates, one of them a German company, according to a report in yesterday's Financial Times Deutschland.
Robert Battye, vice-president for professional services and solutions at Compaq EMEA could not be reached for comment, and Joe Eckert, Compaq's public relations director for global services, declined to give more details on potential acquisitions.
However, Eckert confirmed plans to expand Compaq's consulting and services business and decrease the company's traditional dependence on hardware sales.
"Compaq global services is now 21% of revenue and we intend to grow that to 30% in the next two to three years," said Eckert. "We plan to do that organically as much as we can, but we'll also make acquisitions as necessary."
He added that end-users should see an expanded spectrum of services from Compaq, especially in the Internet arena.
Eckert cited Compaq's pending acquisition of consulting and services firm Proxicom as helping to expand its Internet expertise.
The US$266m (£186m) takeover deal, signed in April, faced a new challenge yesterday when Proxicom announced it had received a more lucrative offer.
Asked whether the deal might fall through, Eckert said, "The Proxicom board has not changed its recommendation to Proxicom shareholders (to sell to Compaq). The merger agreement between Compaq and Proxicom continues in effect."