CSC and the Enterprise Services segment of Hewlett Packard Enterprise (HPE) will merge, creating one of the world’s largest pure-play IT services companies.
With the merger expected to be complete by the end of March 2017, the new company is tipped to have annual revenues of $26 billion and more than 5000 clients in 70 countries. CSC and HPE shareholders each will own approximately 50 per cent of shares in the new company.
According to CSC, the merger of the businesses will provide customers with industry-leading expertise in sectors such as financial services, healthcare and life sciences, transportation, consumer products, and insurance; combined leadership bringing deep turnaround experience and transformation capabilities; strengths in customer service and IT operations; and global scale, with a combined 85 delivery centres and 95 data centres across 70 countries.
The announcement comes just six months after CSC separated into two publicly trade companies – CSRA, which serves public sector clients in the US, and CSC, which works with commercial and government clients globally. The merger represents a major step in the company’s post-separation strategy.
Mike Lawrie, who is currently chairman, president and CEO of CSC, will hold the same role with the new company.
CSC’s Paul Saleh will continue in his role as CFO will the new company, while Mike Nefkens, the current EVP and GM of HPE Enterprise Services, will hold a key role of its executive team, reporting to Lawrie.
“Our proposed merger with HPE Enterprise Services is a logical next step in CSC’s transformation,” Lawrie said. “As a more powerful and versatile global technology services business, the new company will be well positioned to innovate, compete and serve clients in a rapidly changing marketplace. We are excited by the great potential this merger brings to our people, clients, partners and investors, and by the opportunity to strengthen our relationship and collaboration with HPE.”
The new combined company will be well placed to assist customers with digital transformation.
“Clients are feeling the pressure to digital transform their enterprises to meet new business demands and customer expectations. They need a partner with the innovation, scale, leadership and dependability to answer the challenge. As a pure play, the combined company will be built to lead digital transformations using next-generation technology solutions from both companies,” said Lawrie. “It will be able to operate independent of any single hardware provider, while partnering with the world’s leading technology providers, including HPE.”
Meg Whitman, HPE’s president and CEO, will join the new company’s Board of Directors, which will be split equally between nominees of CSC and HPE.
“The ‘spin-merger’ of HPE Enterprise Services with CSC is the right next step for HPE and our customers,” said Whitman. “Enterprise Services’ customers will benefit from a stronger, more versatile services business, better able to innovate and adapt to an ever-changing technology landscape. As two companies with global scale, strong balance sheets and a focus on innovation, both HPE and the new company will be well positioned as leaders in their respective markets.”