trending Market Intelligence /marketintelligence/en/news-insights/trending/vJmFIinIQu6fD7jZsydS9w2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us
In This List

DXC Technology combining US public-sector biz with Vencore, KeyPoint

Banking Essentials Newsletter - November Edition

Online Brokerage Space Should Remain Rich Source Of M&A

StreetTalk – Episode 70: Banks' Liquidity Conundrum Could Fuel M&A Activity

Street Talk Episode 70 - Banks' Liquidity Conundrum Could Fuel M&A Activity

DXC Technology combining US public-sector biz with Vencore, KeyPoint

DXC Technology Co. is combining its U.S. public-sector business with Vencore Holding Corp. and KeyPoint Government Solutions to form a separate, independent publicly traded company.

DXC shareholders will receive shares of the U.S. public-sector business through a spinoff and will own about 86% of the combined company's common shares after the deal closes. Vencore and KeyPoint are owned by affiliates of Veritas Capital, which will remain an investor in the new company. Funds managed by Veritas Capital and its affiliates will own about 14% of the combined company's common shares and will receive $400 million of cash merger consideration. The U.S. public-sector business will distribute $1.05 billion in cash consideration or assumed debt to DXC. DXC will use proceeds from the deal to lower debt, to buy back shares and for other general corporate purposes.

The formation of the company is expected to be completed by the end of March 2018. The combined company will have about $4.3 billion in combined revenues.

Vencore President and CEO Mac Curtis will become CEO of the new company. Marilyn Crouther, senior vice president and general manager of DXC's U.S. public-sector business, will become COO. DXC Chairman, President and CEO Mike Lawrie will become chairman. Veritas Capital CEO Ramzi Musallam will join the new company's board.

Vencore and KeyPoint have received the required shareholder approvals to close the deal.

Chantilly, Va.-based Vencore provides information services, cybersecurity, engineering and analytics for the U.S. government. Loveland, Colo.-based KeyPoint provides investigative services to various organizations in the federal, defense, intelligence and civilian sectors.

Guggenheim Securities is acting as DXC's exclusive financial adviser, and Latham & Watkins is the company's primary legal counsel. Skadden Arps Slate Meagher & Flom is acting as tax counsel, and Wiley Rein and Crowell & Moring are acting as governmental counsel for DXC. Stone Key Partners is acting as financial adviser to Veritas Capital, Vencore and KeyPoint. Schulte Roth & Cabel and Skadden Arps Slate Meagher & Flom are primary legal counsel, and Covington & Burling is acting as governmental counsel.