Computer Sciences Corporation (NYSE:CSC) and Xchanging Plc. announced that the boards of each company have agreed to terms of a recommended transaction under which CSC (through a UK subsidiary) would acquire Xchanging at a price of £1.90 per share in cash, implying an equity value of £480 million, or approximately US$720 million. The acquisition is expected to close in the next six months pending receipt of regulatory approvals.
The combination represents an attractive opportunity to combine CSC’s global scope in insurance, business process outsourcing (BPO) and IT services with Xchanging’s specific expertise and leading software products that support the commercial insurance industry.
“CSC leads clients on their digital transformation journeys,” said Mike Lawrie, CSC’s president and CEO. “Xchanging’s capabilities and experience in the commercial insurance market would complement CSC’s global insurance presence in software, outsourcing and services. I look forward to welcoming Xchanging to the CSC family as we continue to grow our insurance business and invest in our differentiated next-generation solutions.”
CSC is a leader in the provision of software, services and outsourcing to the insurance industry. CSC leverages its extensive software capability to build services and deliver next generation technology to insurance industry customers globally helping them build new digital businesses and transform their current operations. With its global reach, software and technology heritage and next-generation IT capabilities, CSC is well positioned to grow Xchanging globally while delivering costs savings.
Xchanging would offer CSC a newly modernized suite of insurance platforms, which are well established with the largest insurers, managing agents and brokers. In addition, Xchanging is a strong provider of business process services business providing efficient, centralized operations to London market participants.
In addition to the insurance sector, CSC sees opportunities to leverage Xchanging’s capabilities in other areas, such as wealth management outsourcing services and infrastructure and applications. CSC will also assess Xchanging’s other businesses to see how they might add value to CSC’s existing offerings and customer relationships.
The offer being announced today comes after a period of due diligence undertaken on Xchanging by CSC that began on Nov. 12, 2015. (Original Source)
Shares of Computer Sciences closed yesterday at $30.46, down $0.32 or -1.04%. CSC has a 1-year high of $39.14 and a 1-year low of $29.71. The stock’s 50-day moving average is $51.93 and its 200-day moving average is $54.07.
On the ratings front, CSC has been the subject of a number of recent research reports. In a report issued on December 1, Suntrust Robinson Humphrey analyst Frank Atkins downgraded CSC to Hold. Separately, on November 5, Deutsche Bank’s Bryan Keane maintained a Hold rating on the stock .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Frank Atkins and Bryan Keane have a total average return of -10.2% and 15.3% respectively. Atkins has a success rate of 50.0% and is ranked #2680 out of 3640 analysts, while Keane has a success rate of 79.5% and is ranked #91.
Computer Sciences Corp provides information technology (IT) and professional services and solutions. The Company’s reportable segments are Global Business Services (GBS), Global Infrastructure Services (GIS), and North American Public Sector (NPS).