News : CSC Announces Merger with Enterprise Services Segment of Hewlett Packard Enterprise
Tysons, VA, USA, May 24, 2016 -- CSC (NYSE: CSC) announced that its Board of Directors has unanimously approved a plan to merge the company with the Enterprise Services segment of Hewlett Packard Enterprise (HPE).
The strategic combination of the two complementary businesses will create a pure-play IT services companies, positioned to lead clients on their digital transformations.
The merger is expected to be completed by the end of March 2017, subject to shareholder and regulatory reviews and approvals. Following the transaction, CSC and HPE shareholders each will own approximately 50 percent of the new company’s shares.
Today’s announcement comes six months after CSC separated into two publicly traded companies: CSC, to serve commercial and government clients globally, and CSRA, which serves public sector clients in the United States. Both CSC and HPE’s Enterprise Services segments have been on upward trajectories, showing significant improvements in financial performance and client satisfaction scores.
Following completion of the transaction, Mike Lawrie, who currently serves as chairman, president and CEO of CSC, will become chairman, president and CEO of the new company. Meg Whitman, HPE’s president and CEO, will join the new company’s Board of Directors, which will be split equally between nominees of CSC and HPE. CSC’s current CFO, Paul Saleh, will continue in that role after the transaction closes. Mike Nefkens, the current EVP and GM of HPE Enterprise Services, will report to Lawrie and will become a key part of the new company’s executive team. Other executives and directors, as well as the name of the company, will be announced at a later date.
"Our proposed merger with HPE Enterprise Services is a logical next step in CSC’s transformation," Lawrie said. "As a more powerful and versatile global technology services business, the new company will be well positioned to innovate, compete and serve clients in a rapidly changing marketplace. We are excited by the great potential this merger brings to our people, clients, partners and investors, and by the opportunity to strengthen our relationship and collaboration with HPE."
"The ‘spin-merger’ of HPE Enterprise Services with CSC is the right next step for HPE and our customers," said Whitman. "Enterprise Services’ customers will benefit from a stronger, more versatile services business, better able to innovate and adapt to an ever-changing technology landscape. As two companies with global scale, strong balance sheets and a focus on innovation, both HPE and the new company will be well positioned as leaders in their respective markets."
Posted by Veronica Silva Cusi, news correspondent
Today's Tip of the Day - The Name Game
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Computer Sciences Corporation a consulting and information technology (IT) services firm.
About Hewlett Packard Enterprise:
Electronic Data Systems (EDS), headquartered in Plano, Texas, was established in 1962 by H. Ross Perot. Perot’s goal was to start a company that offered skilled electronic data processing management personnel along with the computer equipment. He targeted large corporations and offered long-term contracts at a time when short-term contracts were the norm.
Published: Friday, May 27, 2016