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CSC, HPE Enterprise Services Unveil New Executive Lineup, Operating Structure

CSC and HPE Enterprise Services have cemented their post-merger gameplan, with CSC CEO Mike Lawrie running the entire show and HPE ES leader Mike Nefkens spearheading sales and business development.

CSC and HPE Enterprise Services have cemented their post-merger game plan, with CSC CEO Mike Lawrie running the entire show and HPE Enterprise Services (HPE ES) leader Mike Nefkens spearheading sales and business development.

The $25.6 billion solution provider giant has named 38 of its senior leaders for the expected April 1 close of its mammoth merger, culminating a two-month process managed by one of the world's leading talent advisory firms. The leadership team draws from both CSC and HPE ES, the companies said, with executives tapped for their roles based on experience, performance, leadership qualities and cultural fit.

"Given the task ahead to realize our synergy plans and position NewCo [the new company] for industry leadership, it was a priority to assemble differentiated and proven talent ready to lead NewCo forward," Lawrie told investors on Thursday. The name and branding of the post-merger company will be revealed before the close of the transaction, Lawrie said.

[RELATED: CSC's Top Execs Eligible For $90.5M In Possible Payouts Thanks To HPE Enterprise Services Deal]

The company has named all 17 executives who will report directly to Lawrie, NewCo's chairman, president and CEO. The 8-page letter from Lawrie and Nefkens to company employees was filed with the U.S. Securities and Exchange Commission (SEC), and also details the new company's regional general managers, global industry general managers, global offering leaders and other key executives.

Executive search firm Heidrick & Struggles assessed talent from CSC and HPE ES as part of the company's organization design and selection process. The companies employed a combined 165,000 people at the time the deal was announced in May 2016.

Nefkens will be in charge of the new company's vision and go-to-market strategy as executive vice president and general manager of regions and industries. Nefkens will oversee the new company's primary profit and loss (P&L) drivers, which include six geographic regions, three vertically-integrated global industries, and the company's U.S. public sector (USPS) practice.

The new company's combined worldwide sales force across all regions and industries will be directed by Larry Stack, who's currently HPE's senior vice president and global sales leader. Stack will report to Nefkens, and the regional sales leaders reporting to Stack will be announced in the coming weeks.

The new company's global delivery organization and operating model will be led by Stephen Hilton, who's currently CSC's executive vice president and general manager of Global Infrastructure Services (GIS). In his new role, Hilton will oversee six regional account-specific delivery teams, a network of eight offering delivery and transformation teams, and commercial and restricted delivery centers.

High-growing offerings, global solutions and commercial functions and the post-merger integration management office will handled by Eric Harmon, who's currently HPE's senior vice president and general manager of global practices and emerging business. Under Harmon, the new company's integration management office will focus on capturing value and creating a seamless operating model.


Harmon's team will also be responsible for the growth and profitability of two of the new company's high-growth offering families: big data and analytics, and cybersecurity. His team will also ensure the company has a world-class solutions and commercial function that support sales efforts across all offering families.

General managers for cloud, workload platforms and IT outsourcing; workplace and mobility; application services; enterprise and cloud apps; consulting; and business process outsourcing will all report directly to CEO Lawrie.

The new company's top executives will also report to Lawrie. These include the CFO; chief human resources officer; chief marketing and communications officer; CTO; CIO; general counsel and secretary; head of integrated workforce management; and leader of customer advocacy and joint ventures.

The new company will be organized into six regions: the Americas; the United Kingdom and Ireland; Central and Northern Europe; Southern Europe; the Middle East and Africa; and Australia and New Zealand. It will focus on the following industries: healthcare; insurance; travel and transportation; U.S. public sector; banking; and client, account, and business operations.

In CSC's most recent quarter, which ended Dec. 30, the company reported that sales jumped to $1.92 billion, up 9.5 percent from $1.75 billion a year ago. That edged out the Seeking Alpha projection of $1.9 billion.

Net income sunk to $31 million, or 21 cents per share, down 38 percent from $50 million, or 35 cents per share, last year. On a non-GAAP basis, net income plummeted to $117 million, or 81 cents per share, down 58.2 percent from $280 million, or $1.95 per share, last year. Nonetheless, that crushed Seeking Alpha's estimate of 70 cents per share.

CSC shares were up $1.55 (2.46%) to $64.50 in after-hours trading on Thursday. Earnings were announced after the market closed.

The solution provider saw Global Business Services (GBS) sales skyrocket to $1.05 billion, up 18.1 percent from $886 million a year ago thanks to contributions from recent acquisitions and momentum from the company's business process services offerings.

Global Infrastructure Services (GIS) revenue inched ahead to $871 million, up 0.8 percent from $864 million a year ago due to contributions from recent acquisitions and growth in next-generation offerings such as cloud-based software solutions.

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