The Computer Sciences Corporation Board of Directors has unanimously approved a plan to separate the company into two publicly traded, pure-play leaders: one to serve commercial and government clients globally and one to serve public sector clients in the U.S.
Concurrent with the separation, CSC intends to pay a special cash dividend to shareholders of $10.50 per share at closing, which is expected by October 2015.
“CSC began its turnaround three years ago,” said CEO Mike Lawrie. “That turnaround has progressed strongly, and our focus now turns to positioning the business for long-term growth and leadership. The best way to accelerate that transformation is by separating the company into two businesses, each uniquely positioned to lead its market by focusing strongly on the needs of its clients.”
About the Companies
CSC – Global Commercial will move forward as the trusted information technology (IT) services and solutions partner for Fortune 1,000 companies and non-U.S. government clients, leveraging its industry, infrastructure and consulting expertise to lead customers on their digital transformation journey. With $8.1 billion in FY 15 revenue, CSC Global Commercial will have more than 1,000 customers (including 175 of the Fortune 500), 51,000 employees and 34 delivery centers globally.
CSC – U.S. Public Sector will be a top three provider of mission-specific IT, infrastructure and business services to U.S. federal, state and defense agencies. Building on more than a half-century of government service, the business also will be a leading IT services provider to national security. The public sector business had FY 15 revenues of $4.1 billion and employs 14,000 people, including 3,500 U.S. military veterans.
The two segments have different growth profiles and cash flow dynamics. The separation will allow both companies to better optimize their capital strategies and cost structures, and will provide investors with distinct long-term investment opportunities.
CSC will operate on a “business as usual” basis while details of the separation – including leadership, locations and other details – are being finalized.