IT services company DXC Technology has brought in consultants to help management review a takeover bid.
Or so claimed Bloomberg, who quoted talkative sources close to the matter, who of course asked to remain anonymous. At least one private equity bidder is believed to be in the frame, and news of the interest caused DXC’s share price to rise more than 9 percent.
We have reached out to the company for comment.
This isn’t the first time DXC has been involved in takeover talks since then atos, another provider of transforming infrastructure services, approached its US-based rival to join forces in January 2021. However, Atos classified this as a “potentially friendly transaction”. ultimately didn’t happen.
At the time, DXC branded the offer, which is believed to be in the region of $10 billion, as “inadequate and uncertain given the value the Board believes DXC is creating by executing our transformational journey on a standalone basis.” can”.
DXC was forged in the fire of a merger between two struggling companies, CSC and HPE Enterprise Services came together in 2017 to drive economies of scale in a part of the tech industry decimated by the cloud as companies re-examine how they use technology.
The approach of DXC’s early management team was to cut costs faster than revenue was drained; This included real estate consolidation, including data center space, and relentless rounds of layoffs for employees on the infrastructure services side. Some employees’ morale plummeted internally.
A new leadership team led by Mike Salvino came on board in 2019 and is still trying to turn the ship around.
Revenue had fallen from $24.55 billion in fiscal 2018 to $16.26 billion in fiscal 2022, and the company has reported both reasonable profits and heavy losses over those years.
DXC is not alone in facing the challenges: IBM’s Global Technology Services division suffered a similar fate lately and decided outsource the business into a separately traded entity, Kyndryl. Now infrastructure services are no longer a drag on Big Blue’s revenue growth. And Atos is going through the same process this year, spitting out its faster-growing and shrinking businesses two separate organizations. ®
https://www.theregister.com/2022/09/22/dxc_linked_to_private_equity/ DXC Technology in connection with private equity takeover talks • The Register