CSC has entered into a binding Scheme of Implementation agreement to acquire Australian IT services company, UXC Limited, following a five-week due diligence process.
The acquisition offer is slightly lower than originally suggested, at A$1.22 per share with a franked divided of A$0.02 per share, down from A$1.26 per share. With 345 million UXC shares outstanding, the total value of the transition will be A$427.6 million, with the purchase price representing an 8{db8ca4bbfe57dc8f9b6df9233a3a6c04f4968125edf9bb330d4f787c3a87cd09} premium on the share value at the close of trading last week.
The revised offer “reflects an acknowledgement by both parties that the synergies available as a result of the scheme may take longer to be realised than first anticipated, a higher required working capital position than initially anticipated by the bidder and differences between US GAAP and Australian accounting standards”, a statement to the ASX by UXC said.
UXC chairman Geoff Cosgriff said, “While we have always maintained that we are a strong independent Australian company with a great track record, the Board believes that the proposal received from CSC represents an opportunity for UXC shareholders to crystallise the value of their holdings in a timeframe that would not otherwise be available.”
Mike Lawrie, president and CEO, CSC, said the company looks forward to the prospect of the UXC team joining CSC.
“The addition of UXC would continue the process of rebalancing our offering portfolio and strengthening our global commercial business. UXC’s application platform capabilities – combined with CSC’s existing strengths in cloud, cyber, and big data – would enhance what the two companies already deliver to clients in the region,” said Lawrie.
Together, the combined companies will be among the region’s largest IT service companies, based on revenues. The acquisition is subject to shareholder and regulatory approvals, and is expected to complete in February 2016.
