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DXC to pick up Luxoft
Posted on Tuesday, 08 January 2019 14:59
DXC Technology is buying digital consulting and engineering business Luxoft Holding for USD 2.00 billion.
Under the terms of the acquisition, the target’s shareholders will receive USD 59.00 per share in cash, representing a bid premium of 86.1 per cent based on the listed class A shares closing price of USD 31.70 on 4th December 2018.
The transaction, which will strengthen DXC’s portfolio through access to Luxoft’s digital engineering services, is expected to complete in June 2019, subject to regulatory approval.
Established in 2000, Switzerland-based Luxoft provides digital services, including strategy, consulting and engineering for companies in the automotive, financial services, healthcare and telecommunications sectors.
The company employs 13,000 people across sites in North America, Europe and the Asia-Pacific region.
It currently operates over 42 sites across 21 countries, and posted USD 906.77 million in sales for the financial year ended 31st March 2018, up from USD 785.56 million in the preceding 12 months.
Mike Lawrie, chief executive of DXC, said: “The addition of Luxoft accelerates DXC’s growth strategy as we equip the company to meet the digital requirements of our clients today and in the future.”
By combining the target’s expertise in car systems and the buyer’s experience in cloud and security-based connected auto services, the deal is expected to create new opportunities within the automotive industry.
The deal follows a flurry of acquisitions for DXC in the last 12 months; it agreed to buy Australian consulting services provider System Partners for an undisclosed sum in September 2018.
Further purchases include software developer Sable Systems and software-as-a-service provider eBECS, both of which it picked up in April 2018.
No financial details were announced for either transaction.
Headquartered in Herndon, Virginia, DXC claims to be the world leader in end-to-end information technology (IT) services.
The company integrates IT systems for clients including Amazon, Dell, Microsoft, PwC and IMB, among others.
For the six months ended 30th September 2018, DXC posted revenue of USD 10.30 billion, down from USD 10.69 billion in the corresponding period of 2017.
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