EDS Beefs Up Gov't Coverage With Software Purchase

EDS today announced it would purchase an equity interest of approximately 93 percent in Saber Holdings, a leading provider of software and services to U.S. state governments, for approximately $420 million in cash. Saber's chief executive officer Nitin Khanna and president and chief operating officer Karan Khanna will retain an approximate 7 percent interest in Saber and continue to lead the company following the closing.

Saber is a fast-growing provider of software products and services to state and local governments. Saber has operations in 35 states, and has more than doubled its revenue each year since 2004. For EDS, the transaction will strengthen its already well-established ties to the U.S. government sector.

"EDS has a good size government business already. For example, we are leaders in the Medicaid space. We have a rich 40-plus year history in the health and human services space," said Travis Jacobsen, spokesman for EDS. "For a time, EDS has been saying we'll be growing our business in the application service sector, and we are ready to move up the stack when it comes to providing services to clients. This Saber component is for state and local administrative functions, not health and human services, but other areas involving online presence for constituents, for example, voter registrations, elections, DMV forms."

Saber's current product line includes market-leading software and services that underpin essential, federally funded government functions such as voter registration, election management, public retirement programs, human services, public health services, motor vehicle registration and unemployment insurance.

"So, while EDS has done a lot of work for state and local clients, this transaction creates a standard platform we can add to existing businesses and get a larger opportunity than previously," Jacobsen said. "It strengthens our market presence from what we already have, and, added to our Medicaid presence, gives us very good presence in the state and local government market."