Computer Sciences Corporation To Split in Two
The venerable IT services and solutions provider Computer Sciences Corp. (CSC) is splitting in two.
The Falls Church, Va.-based company, which was founded in 1959, is walling off its U.S. public sector business from the rest of its operations in a move approved by its board of directors and unveiled this week. CSC is a major Microsoft partner, listing Microsoft among its 15 global technology alliances.
The main business will be called CSC-Global Commercial, with customers drawn from Fortune 1,000 companies and non-U.S. government clients. That side of the business accounts for $8.1 billion in fiscal year 2015 revenue, more than 1,000 customers, 51,000 employees and 34 delivery centers globally, CSC said.
The other business will be called CSC-U.S. Public Sector and will serve U.S. federal, state and defense agencies. With $4.1 billion in FY 15 revenues, the public sector business employs 14,000 people, CSC said.
In a statement, CSC CEO Mike Lawrie noted diverging "growth profiles and cash flow dynamics" for the two sides of the business. "Our analysis shows significant benefits of going with a pure-play strategy. We expect this change to enable both businesses to enhance innovation and improve delivery, in ways that are consistent with the rate and pace of the markets they serve," Lawrie said.
The separation is expected to be completed by the end of October. At that point, CSC shareholders will own shares of both companies. CSC announced plans to pay a special cash dividend to shareholders of $10.50 per share when the separation is closed.
Posted by Scott Bekker on May 20, 2015