Source: Computer Sciences Corporation
Computer Sciences Corporation (NYSE:CSC) and Covansys Corporation (NASDAQ:CVNS) today announced that they have entered into an agreement under which CSC will acquire Covansys for $34.00 per share in an all-cash transaction.
The transaction is valued at approximately $1.3 billion, and is expected to be earnings per share neutral to CSC during the first 12 months.
The agreement was approved by the Board of Directors of CSC. The Covansys Board of Directors, on the recommendation of a Special Committee composed entirely of independent directors, has approved the agreement and recommends that Covansys stockholders approve the merger. The transaction is expected to be completed during the second quarter of CSC's fiscal year 2008.
"This acquisition furthers CSC's strategic goals of increasing shareholder value and growing our business both organically and by acquisition," said CSC Chairman and Chief Executive Officer Van B. Honeycutt. "With this action, we are significantly strengthening our capabilities and presence in India as well as creating an additional market channel for our industry, consulting and outsourcing solutions."
"We believe this is an outstanding transaction for our shareholders, clients and employees," said Raj Vattikuti, President and CEO of Covansys. "CSC is at the forefront of the global IT services industry, making it an ideal partner for Covansys. This combination meets our goal of delivering significant value to our shareholders. It also creates exciting opportunities for Covansys employees while increasing our capacity to penetrate new industry verticals and deliver superior service to our existing clients. I look forward to working with the new combined team."
"With this action, we have significantly accelerated our India offshore business plan with the addition of a U.S. and international direct sales force," said CSC President and Chief Operating Officer Mike Laphen. "The CSC-Covansys combination reinforces our commitment to continuing to build a strong offshore platform, and offers a broad range of capabilities to our clients that can be serviced directly from India or through our existing businesses."
Both Covansys and CSC's operations in India have been ranked among the top 10 places to work for IT professionals in India. The acquisition nearly doubles the size of CSC's workforce in India to approximately 14,000.
The agreement requires approval by the holders of a majority of the outstanding Covansys shares and is subject to customary conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
Gibson, Dunn & Crutcher LLP is acting as legal advisor to CSC. UBS Securities LLC is acting as financial advisor and has affirmed the fairness of the transaction to the Board of Directors of CSC.
Butzel Long is acting as legal advisor to Covansys. Credit Suisse is acting as financial advisor and delivered a fairness opinion to the special committee of the Board of Directors of Covansys, and Katten Muchin Rosenman LLP is acting as the special committee's legal advisor.