MERGERS & ACQUISITIONS
CSC sells credit services unit for $1B
Company divests credit services unit as part of its turnaround plan
- By Mark Hoover
- Dec 03, 2012
Computer Sciences Corp. has reached an agreement with Equifax for the $1 billion sale of its credit services unit, making this its second divestiture in six weeks.
At the end of October, the company had entered into an agreement with Dedagroup, an Italian information technology services company, for the sale of CSC's consulting and systems integration services part of its business in Italy.
“This transaction advances CSC’s turnaround by reshaping our portfolio and enabling the company to focus on next-generation technology solutions and services,” said CSC president and CEO, Mike Lawrie.
After-tax proceeds from the sale will be $750 million to $800 million, the company said. CSC intends to use $300 million to $400 million to repurchase shares and contribute $300 million to $400 million to its pension plans. the rest will be used for general corporate purchases, the company said.
Its credit services unit is the largest independent U.S. consumer credit reporting agency, owning credit files in 15 Midwestern and Central U.S. states representing 20 percent of the U.S. population.
The unit’s current fiscal year revenue figure is $230 million, with $100 million in operating income, and earnings per share of 40 cents.
The transaction should close by the end of the year, after regulatory reviews are concluded.
Mark Hoover is a contributing writer to Washington Technology.