Health Plans Solutions (HPS) provides claims administration services for approximately 24 million insured people. DST hopes its purchase of the business will expand its presence in the healthcare processing services industry, which it says currently uses DST’s AWD and Output Solutions products.
The exchange value of Computer Sciences Corporation (CSC) shares at closing have been agreed at $45.53 per share. On that basis, HPS will also hold $224.6m of cash at the time of the exchange.
DST expects to report a net income of $50m from the exchange, but has stated that the operations of HPS will be neutral to its diluted earnings per share in 2005. The impact on earnings per share is said to be dependent upon the finalization of the business combination accounting entries, which includes the allocation of $85m of value in excess of the net assets of the HPS business being received.
The closing of the transaction, which is anticipated in April 2005, is subject to Hart-Scott-Rodino clearance and the receipt of tax opinions.
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