Computer Sciences Corporation (CSC) announced that its board of directors has unanimously approved a plan to separate the company into two publicly traded, pure-play leaders: one to serve commercial and government clients globally and one to serve public sector clients in the United States.
“CSC began its turnaround 3 years ago,” said CEO Mike Lawrie. “That turnaround has progressed strongly, and our focus now turns to positioning the business for long-term growth and leadership. The best way to accelerate that transformation is by separating the company into two businesses, each uniquely positioned to lead its market by focusing strongly on the needs of its clients.”
One unit, CSC–Global Commercial, intends to serve as a trusted IT services and solutions partner for Fortune 1,000 companies and non-U.S. government clients, leveraging its industry, infrastructure and consulting expertise to lead customers on their digital transformation journey. With $8.1 billion in FY 15 revenue, CSC Global Commercial will have more than 1,000 customers (including 175 of the Fortune 500), 51,000 employees and 34 delivery centers globally. The business will retain its leadership status across multiple markets, along with innovative offerings and industry-leading strategic partnerships.
The second unit, CSC–U.S. Public Sector, will be a provider of mission-specific IT, infrastructure and business services to U.S. federal, state and defense agencies. Building on more than a half-century of government service, the business also will be a leading IT services provider to national security. The public sector business had FY 15 revenues of $4.1 billion and employs 14,000 people, including 3,500 U.S. military veterans.
CSC’s Board of Directors made the decision to separate the commercial and public sector businesses as a result of several factors. The “Get Fit” phase of the company’s turnaround has been successfully completed. Over the last three years, CSC has implemented a common operating model, streamlined its cost structure, improved its go-to-market performance and brought in proven leadership.
On the commercial side, clients seek partners with a deep understanding of their business who can help lead their digital transformations. In the U.S. public sector, technology demands are increasing, and clients want providers with specific experience in government-focused innovation. By separating, each business will have the scale –among the largest in their respective categories –as well as the focus to meet unique customer needs and market requirements.
Completion of the separation will not require a shareholder vote but will be subject to customary conditions, including final approval of the CSC board of directors, the receipt of a favorable opinion from counsel with respect to the tax-free nature of the transaction, and the effectiveness of a Form 10 filing with the U.S. Securities and Exchange Commission.
For more information, visit the company's website at www.csc.com.