Computer Sciences Corporation (NYSE:CSC) confirmed that it has entered into a binding Scheme of Implementation agreement to acquire the shares of UXC Limited (ASX: UXC), a leading IT services company based in Australia.
CSC will acquire 100 percent of the issued capital of UXC for a cash consideration of A$1.22 per share. In addition, UXC will pay a franked dividend of A$0.02 cash per share for the half year ending Dec. 31, 2015. The news follows a period of due diligence that began with an announcement by the two companies in early October.
Based on 345 million shares of UXC outstanding, the total value of the transaction would be approximately A$427.6 million (US$307.9 million) upon completion. The transaction is subject to approval by UXC shareholders, followed by the customary regulatory and court approvals for transactions of this type in Australia. The transaction timeline is expected to conclude by February 2016.
UXC is Australia’s largest independent and publicly owned IT services company, with reported fiscal 2015 annual revenues of A$686 million (US$493.9 million) and nearly 3,000 employees. The company is a regional leader in enterprise application capabilities, including Microsoft Dynamics, SAP, Oracle and ServiceNow implementations.
“We look forward to the prospect of the UXC team joining CSC,” said Mike Lawrie, CSC’s president and CEO. “The addition of UXC would continue the process of rebalancing our offering portfolio and strengthening our global commercial business. UXC’s application platform capabilities – combined with CSC’s existing strengths in cloud, cyber, and big data – would enhance what the two companies already deliver to clients in the region.”
A combined CSC-UXC would be among the region’s largest IT service companies, based on revenues. The combination would offer an expanded client base and deeper industry expertise for both firms. (Original Source)
Shares of Computer Sciences closed today at $69.56, down $0.39 or -0.56%. CSC has a 1-year high of $73.29 and a 1-year low of $58.77. The stock’s 50-day moving average is $66.47 and its 200-day moving average is $65.35.
On the ratings front, Computer Sciences has been the subject of a number of recent research reports. In a report issued on November 5, Deutsche Bank analyst Bryan Keane maintained a Hold rating on CSC. Separately, on September 1, BMO’s Keith Bachman reiterated a Hold rating on the stock and has a price target of $72.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Bryan Keane and Keith Bachman have a total average return of 16.5% and 17.7% respectively. Keane has a success rate of 81.0% and is ranked #89 out of 3636 analysts, while Bachman has a success rate of 61.3% and is ranked #67.
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).