Computer Sciences Corporation Acquiring Two Companies
Tech services giant Computer Sciences Corp. (CSC), in the midst of splitting itself in two, just announced two "tuck-in" acquisitions.
One is Fruition Partners, which CSC describes as the largest ServiceNow-exclusive service management consulting firm. Fruition Partners is based in Chicago and does business in the United States, Canada, the U.K. and South America. The company brings 300 ServiceNow practitioners and 800 clients to CSC. Fruition Partners will become part of CSC's Global Enterprise Solutions Consulting Group, and beef up CSC's ServiceNow practice, while joining other practices, including SAP, Oracle, Workday and Salesforce.
The other of the two deals announced Tuesday is for Fixnetix. London-based Fixnetix bills itself as a managed services provider to financial companies, providing a high-efficiency trading appliance and 40 co-location and proximity hosting centers worldwide for mission-critical trading systems.
Terms of the deals were not disclosed. CSC President, CEO and Director Mike Lawrie said in an investor call that the company's schedule requires closing the deals in September or October.
The announcements came as the 70,000-employee CSC released financial results for the first quarter of its fiscal year 2016. Earnings rose nearly 10 percent to $160 million on a 15 percent drop in revenues to $2.76 billion. Those results beat analysts' expectations on profits but missed on revenues.
Falls Church, Va.-based CSC plans to separate into two companies later this year -- a commercial business and a North American public sector business.
In response to analyst questions during the earnings call, Lawrie provided some context about this week's acquisitions, as well as possible future deals.
"These businesses that we bought today are what I'd classify...as tuck-ins. These aren't huge acquisitions by any stretch of the imagination. But they're examples of new offerings that we think can grow fairly rapidly over this period of time and help shrink that gap between our traditional business and these new businesses," said Lawrie, according to a Seeking Alpha transcript of the call.
Lawrie also hinted at a possibility that CSC's public sector business might be acquired after the separation is complete. "I think once we separate the business, obviously, it's a publicly traded company, so it's going to take advantage of opportunities both as an acquirer or as an acquiree," Lawrie said. "I do think the general landscape in the federal government business will be consolidation over time."
Posted by Scott Bekker on August 12, 2015