DXC Technology to Combine its U.S. Public Sector Business with Vencore Holding Corporation and KeyPoint Government Solutions to Create an Independent, Publicly Traded Company Serving U.S. Government Clients
DXC Technology (NYSE: DXC), the world’s leading independent, end-to-end IT services company, today announced that its board of directors has unanimously approved a plan to combine its U.S. Public Sector (USPS) business with Vencore Holding Corporation and KeyPoint Government Solutions to form a separate, independent publicly traded company to serve U.S. public sector clients.
Both Vencore and KeyPoint are currently owned by affiliates of Veritas Capital, a leading private equity firm recognized for its in-depth knowledge and understanding of government and technology-enabled end markets. Veritas Capital will remain an investor in the new company.
The formation of the new company is expected to be completed by the end of March 2018, subject to regulatory and other approvals.
“Clients and investors in both the commercial and public sectors are recognizing the higher value of IT service providers with scale and differentiation,” said Mike Lawrie chairman, president and CEO of DXC. “Separating our global commercial and USPS business, and combining it with Vencore and KeyPoint, will accelerate transformation with two strategically focused companies, each uniquely positioned to lead its market by prioritizing the needs of its clients.”
The combination of USPS with Vencore and KeyPoint will create a top 5 services provider to the U.S. government, offering differentiated, mission-driven solutions in cybersecurity, big data analytics, cloud engineering, enterprise IT services, and systems engineering – all enabled by a portfolio of cutting-edge Intellectual Property (IP).
The new company will be a strategic partner to the federal government in solving the most demanding informational and national security challenges and driving technology modernization. With approximately $4.3 billion in combined revenues and a highly skilled workforce of more than 14,000, the new company will serve a robust base of established and non-overlapping clients based on long-standing relationships.
The new company will provide meaningful scale and end-to-end technology solutions, leveraging a full spectrum of offering families and industry expertise to ensure broader access to customers, capabilities and contract vehicles. The new company’s name will be determined at a later date.
“The combination of USPS’s enterprise IT leadership with Vencore’s deep mission understanding and advanced innovation will provide unmatched differentiation in the market,” said Ramzi Musallam, the CEO and managing partner of Veritas Capital. “This new company will have the unparalleled expertise and breadth of capabilities to make it the trusted partner of choice supporting U.S. government clients with their most critical missions.”
Mac Curtis, president and CEO of Vencore, will become the chief executive officer of the new company. Marilyn Crouther, senior vice president and general manager, DXC USPS, will become the new company’s chief operating officer. Mike Lawrie will chair the board of the new company. Additional members of the new company’s senior management team will be drawn from DXC, Vencore and KeyPoint and will be named at a later date as integration planning progresses.
“Given our highly-skilled technical talent, differentiated innovation, and decades of strong customer relationships, I am excited to lead our combined company in its next stage of growth,” Curtis said. “We will leverage our deep mission domain knowledge, leading-edge IP and comprehensive suite of IT solutions to address larger markets and intensify our focus on meeting our clients’ needs in a rapidly changing and attractive marketplace.”
DXC, which was formed by the merger of CSC and the Enterprise Services business of Hewlett Packard Enterprise on April 1, 2017, will remain a technology leader in commercial and non-U.S. public sector IT services with the focus on helping clients transform through innovation and delivery excellence.
- Following the expected transaction, DXC will have 6,000 clients in some 70 countries throughout the world;
- The business will retain its leadership position across multiple markets, with diversified next-generation IT offerings and industry-leading strategic partnerships; and
- DXC will continue to serve certain state and local clients, notably state Medicaid programs.
DXC’s board of directors made the decision to separate its commercial and U.S. public sector businesses, and to establish the new company through the combination with Vencore and KeyPoint, as a result of several factors:
- The commercial and U.S. public sectors of the IT services market are evolving at an accelerating pace;
- Both DXC and the new company will be able to pursue focused growth strategies, optimize capital structure and capital allocation, and drive customer value through highly tailored offerings and services; and
- The combination of USPS with Vencore and KeyPoint presents a unique opportunity in the U.S. public sector segment that will significantly strengthen USPS’s competitive position.
The new company will deliver the most mission-enabling, innovative and technologically-advanced IT solutions to U.S. government clients by:
- Leveraging innovation backed by highly-skilled talent, technical expertise, advanced IP, and a deep partnership ecosystem to enhance the technological sophistication and capabilities of its clients;
- Bringing transformative digital skills and mission-enabled offerings in advanced analytics, cyber security, and agile software development (more than 1,000 agile certified developers) that will position the new company as the U.S. government’s partner of choice to help clients overcome mission-critical challenges; and
- Tapping into a larger addressable market enabled by deep IP (with 260-plus issued/licensed patents and significant R&D investment), industry expertise, and client intimacy.
Here are the key details regarding the contemplated transactions:
- DXC’s shareholders will receive shares of USPS via a spin-off and will own approximately 86 percent of the combined company’s common shares upon consummation of the transactions;
- Funds managed by Veritas Capital and its affiliates will own approximately 14 percent of the combined company’s common shares upon consummation of the transactions, and will receive $400 million of cash merger consideration;
- USPS will distribute $1.05 billion in cash consideration (or assumed debt) to DXC;
- DXC will use proceeds from the transaction to reduce debt, repurchase shares, and for other general corporate purposes;
- Veritas Capital’s Ramzi Musallam will join the board of the new company, with remaining board members named at a later date; and
- The contemplated transactions will be structured as a “Reverse Morris Trust” transaction, with the separation of USPS and the related mergers with Vencore and KeyPoint being tax free to DXC and its shareholders.
Vencore and KeyPoint have each received the necessary shareholder approvals to complete the transactions. The closing of the transactions will be subject to various customary closing conditions, including regulatory approvals, receipt of a tax opinion, and the effectiveness of the registration statement with respect to USPS common shares being distributed to DXC shareholders.
Vencore, KeyPoint, and Veritas Capital
Vencore is a proven provider of information solutions, cyber security, engineering and analytics for the U.S. government. With more than 40 years of experience working in the defense, civilian and intelligence communities, Vencore and its transformational applied research organization, Vencore Labs, design, develop and deliver high impact, mission-critical services and solutions to overcome its customers’ most complex problems. Vencore has 3,750 employees and is based in Chantilly, VA.
KeyPoint is a mission-critical provider of specialized investigative services to a broad range of organizations spanning the federal, defense, intelligence and civilian sectors. Leveraging proprietary algorithmic workflow systems and a nationwide footprint of highly experienced investigators and subject matter experts, KeyPoint provides critical information to support sensitive decisions. KeyPoint has a workforce of 3,500 and is based in Loveland, CO.
Veritas Capital is a leading private equity firm that invests in companies that provide critical products and services, primarily technology and technology-enabled solutions, to government and commercial customers worldwide, including those operating in the aerospace & defense, healthcare, technology, national security, communications, energy, and education industries. Veritas Capital seeks to create value by strategically transforming the companies in which it invests through organic and inorganic means.
Guggenheim Securities is acting as exclusive financial advisor to DXC. Latham & Watkins is acting as primary legal counsel to DXC. Skadden, Arps, Slate, Meagher & Flom is acting as tax counsel to DXC, and Wiley Rein and Crowell & Moring are acting as governmental counsel to DXC.
Stone Key Partners is acting as financial advisor to Veritas Capital, Vencore and KeyPoint. Schulte Roth & Zabel and Skadden, Arps, Slate, Meagher & Flom are acting as primary legal counsel to Veritas Capital, Vencore and KeyPoint. Covington & Burling is acting as governmental counsel to Veritas Capital, Vencore and KeyPoint.
Investor Call and Webcast
DXC senior management will discuss this announcement at 5:45 p.m. EDT today on a conference call. The dial-in number for domestic callers is +1-800-263-0877. Callers who reside outside of the United States or Canada should dial +1-323-794-2551. The passcode for all participants is 9993037. The presentation slides will be available on DXC’s Investor Relations website.
A replay of the conference call will be available from approximately two hours after the conclusion of the call until Oct. 18, 2017. Local replay dial-in numbers can be found at link. The replay passcode is also 9993037. A replay of this webcast also will be available on DXC’s website.
ABOUT DXC TECHNOLOGY
DXC Technology (DXC: NYSE) is the world’s leading independent, end-to-end IT services company, helping clients harness the power of innovation to thrive on change. Created by the merger of CSC and the Enterprise Services business of Hewlett Packard Enterprise, DXC Technology serves nearly 6,000 private and public sector clients across 70 countries. The company’s technology independence, global talent and extensive partner network combine to deliver powerful next-generation IT services and solutions. DXC Technology is recognized among the best corporate citizens globally. For more information, visit dxc.technology
All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements, including statements regarding our intention to separate the company into two, independently publicly traded companies and expected benefits to be realized as a result of the separation. There is no assurance as to the timing of the separation or whether it will be completed. These statements represent DXC Technology’s intentions, plans, expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved. These statements are subject to risks, uncertainties, and other factors, many outside of DXC’s control, that could cause actual results to differ materially from the results described in such statements. For a description of these factors, please see DXC’s most recent Quarterly Report on Form 10-Q.
Rich Adamonis, Global Media Relations
Jonathan Ford, Investor Relations
KeyPoint Government Solutions
Susan A. Ordakowski, +1-703-608-5268
Vencore Holding Corporation
Lorraine M. Corcoran, Corporate Communications
Patrick Scanlan, Sard Verbinnen
Om Business Wire
(c) 2018 Business Wire, Inc., All rights reserved.
Business Wire, a Berkshire Hathaway company, is the global leader in multiplatform press release distribution.
Følg saker fra Business Wire
Registrer deg med din epostadresse under for å få de nyeste sakene fra Business Wire på epost fortløpende. Du kan melde deg av når som helst.
Siste saker fra Business Wire
"Panasonic Prime Smash!" Has Been Given a Complete Makeover - An iPhone, iPad Game That Awakens Children's Interest in Mathematics26.9.2018 03:05 | Pressemelding
On August 28, 2018, Panasonic Corporation gave the iPad app, "Panasonic Prime Smash!" a complete makeover. The new release includes the iOS 11 compatible iPhone app as well. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20180925006294/en/ The screen of "Panasonic Prime Smash!": In the game, balls with numbers are blown. If it is a prime number, capture it by tapping the ball. (Graphic: Business Wire) [Video] Smartphone game application "Panasonic Prime Smash!" https://channel.panasonic.com/contents/24401/ "Panasonic Prime Smash!" overview "Panasonic Prime Smash!" is a game app that teaches children about the atom of numbers, or prime numbers in a fun, enjoyable way. Balls bearing numbers will appear on the screen one after another. If the number is a prime number, you touch that number. If the number is not a prime number, you "Smash" it, transform it into a prime number, and then touch it. That number will be added to your t
Toshiba's New Global Brand Identity to Promote Growth and Development26.9.2018 02:01 | Pressemelding
Toshiba Corporation (TOKYO:6502) has today unveiled a new global brand identity the “Essence of Toshiba,” a restatement of its abiding purpose and values. The Essence of Toshiba replaces Toshiba’s previous Group Management Vision, Brand Statement and Brand Tagline. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20180925006288/en/ (Graphic: Business Wire) The Essence of Toshiba will be applied across all Toshiba Group companies and in all markets, as part of an initiative to harmonize and integrate the Group’s diverse businesses and operations around the world. As a forward-looking and entrepreneurial Toshiba continues its business transformation, the restated corporate philosophy and new brand identity will provide a strong and consistent framework for all communication. A summation of core management values and the DNA that has shaped the company for 143 years, the Essence of Toshiba will guide Toshiba in building a sustainab
Moody’s Names Mona Breed as Chief Information Officer25.9.2018 20:30 | Pressemelding
Moody’s Corporation (NYSE:MCO) announced today that Mona Breed will join the company as Chief Information Officer (CIO), effective October 15, 2018. As CIO, Ms. Breed will lead Moody’s global technology infrastructure and programs. She will report to Raymond McDaniel, President and Chief Executive Officer of Moody’s. “With nearly 30 years of experience embedding innovation and technology programs at leading financial and professional services firms, Mona’s insight and expertise will be invaluable as we enhance our technology capabilities and leverage our investments,” said Raymond McDaniel President and Chief Executive Officer of Moody’s. Prior to joining Moody’s, Ms. Breed led IT infrastructure for Oppenheimer Funds, where she drove innovation and transformation, including the firm’s cloud computing, unified communication and collaboration, data center operations and workplace technologies. She has also held senior technology roles at PricewaterhouseCoopers and Apollo. Ms. Breed succe
IWBI Announces First WELL Portfolio Participants25.9.2018 18:00 | Pressemelding
The International WELL Building Institute™ (IWBI™) announced today the first participants in WELL Portfolio™, a new streamlined pathway for WELL Certification™ for multiple new or existing buildings and tenant spaces in a single portfolio. Being released as part of the WELL v2™ pilot, the latest iteration of the WELL Building Standard™ (WELL™), it is part of a suite of enhancements to WELL that addresses growing demand across the building industry for a program that helps owners, developers and tenants streamline and scale health and wellness upgrades to their real estate assets. The announcement quickly follows the launch of WELL v2, the second iteration of IWBI’s pioneering WELL Building Standard. The addition of an early phase review process enabling projects to seek the WELL D&O™ designation, introduced in WELL v2, allows portfolio projects to move through the certification process in a more streamlined and systematic fashion across their asset base, with a specific focus on polici
Mobile Industry Accelerating Delivery of Sustainable Development Goals, According to Latest GSMA Report25.9.2018 17:00 | Pressemelding
The global mobile industry is demonstrating significant and measurable impact in contributing to the UN’s Sustainable Development Goals (SDGs) and is strengthening its commitment to improving lives around the world, according to a new GSMA study. The 2018 edition of the GSMA’s annual ‘Mobile Industry Impact’ report, published at the UN General Assembly this week, found that the industry has continued to increase its contribution against all 17 Goals since mobile become the first sector in the world to commit to delivery of the SDGs in 2016. This growing impact reflects mobile’s unprecedented global scale, which provides a platform to connect unconnected communities, reduce poverty, improve access to healthcare and education, and drive sustainable economic growth. “More than two-thirds of the people on the planet are now connected to a mobile network and, for many, mobile is the primary – sometimes only – channel for accessing the internet and life-enhancing services,” commented Mats Gr
PMI: Taking Bold Action for Global Change: a Conversation on Tobacco Today and Transformation for Tomorrow25.9.2018 15:43 | Pressemelding
During the 2018 Concordia Annual Summit, taking place in September 24 & 25 in New York, André Calantzopoulos, CEO of Philip Morris International, delivered a speech highlighting the need to have a dialogue between the industry, leaders, policy-makers, scientists, medical, and public health professionals in order to provide the 1.1 billion people who smoke with better alternatives to cigarettes. The Concordia Annual Summit, which coincides with the United Nations General Assembly (UNGA) meeting, convenes the world’s most prominent business, government, and nonprofit leaders to foster dialogue and enable effective partnerships for positive social impact. The remarks by André Calantzopoulos follow: “I'm the Chief Executive Officer of a tobacco company. I’m here today because, as global leaders come together in New York for the United Nations General Assembly, this is the time and place to discuss today's problems and their potential solutions. “Smoking tobacco is a behavioral risk factor