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May 15, 2015

CSC to split business following sale attempts

The company may announce the split as soon as next week.

By CBR Staff Writer

US-based Computer Sciences Corporation (CSC) is planning to split its commercial information technology and government business. The move follows several attempts by the company to sell itself to potenital buyers.

It has been reported that CSC may announce the split as soon as next week when it is due to release its fiscal 2015 earnings on 19 May.

Sources cited by Reuters said that even though CSC is still open to acquisitions, it feels a split would allow shareholders to get stock in a new firm as the attractive and tax-efficient agreement to be undertaken.

Recently, the company secured buyout interest from CapGemini, HP, CGI Group and several other private equity companies. Apparently, none of the offers met CSC’s valuation expectations.

Earlier this year, Jana Partners disclosed a a 5.9% activist stake in CSC and said it had held negotiations with the company on its strategic alternatives.

The North American public sector division of CSC generated $998m in revenues for the nine-months ending 2 January 2015. The company’s non-government divisions had combined revenues of $1.9bn.

CSC has been eyed by buyers since 2005, when Lockheed Martin was said to have shown interest in it.

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The company is implementing a cost-cutting campaign due to budget pressures from the US Government.

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