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DXC Is Reportedly A Private Equity Acquisition Target
Joseph F. Kovar
The potential interest in DXC by at least one private equity firm comes after the company abruptly pulled out of its investor presentation at a Deutsch Bank conference earlier this month.
Global systems integrator and solution provider DXC Technology has started working with advisors after receiving interest from private equity in acquiring the company, according to Bloomberg.
The news outlet, citing unnamed people close to the matter, Wednesday reported that at least one private equity firm has approached DXC to discuss acquiring the Ashburn, Va.-based company.
DXC was formed in 2017 by the merger of former solution provider CSC and Hewlett Packard Enterprise’s Enterprise Services division.
A DXC spokesperson responded via email to a CRN request for more information by saying the company does not comment on “market rumor and speculation.”
News of possible private equity interest in DXC came after the company on Sept. 1 abruptly cancelled its attendance at the Deutsche Bank 2022 Technology Conference in Las Vegas, a move that was followed by a 7.9-percent rise in the company’s share price, according to Seeking Alpha. The company had been planning to make an investor presentation at the conference.
DXC’s stock price Wednesday is up 1.7 percent to $27.51 per share, which is slightly lower than the $28.11 per share reached the day after it pulled out of the Deutsche Bank conference.
This would not be the first time DXC was up for sale. The company in early 2021 was in talks to be acquired by French IT services giant Atos. However, Atos in February of 2021 canceled its DXC bid after DXC said Atos’ offer was “determined to be inadequate and lacking certainty in light of the value the Board believes DXC can create on a standalone basis by executing our transformation journey,” DXC said at the time.
DXC in early August reported first fiscal quarter 2023 revenue of $3.71 billion, down 10.5 percent over its first fiscal quarter 2022. This compares to an 8.0-percent drop in revenue during its first fiscal quarter 2022 compared to the previous year.
DXC’s net income during the quarter rose 2.8 percent year-over-year to $103 million, but that a significantly smaller growth rate than the 6.8-percent growth it experienced in the first fiscal quarter 2022 vs. 2021..