EDS buys Saber for $420M

In a move to boost its state- and local-government portfolio and capabilities, EDS Corp. has announced plans to acquire Saber Holdings Inc.

EDS will pay $420 million cash for 93 percent ownership in the Portland, Ore.-based software and services company.

Saber's Chief Executive Officer Nitin Khanna and President and Chief Operating Officer Karen Khanna will keep about 7 percent interest in the company and continue to lead it once the deal closes later this year.

Saber focuses on providing software and services to state governments. It supports an array of federally funded state programs, such as voter registration and election management, public retirement programs, human services, public health services, motor vehicle registration and unemployment insurance.

The acquisition brings complementary capabilities to EDS' existing state and local business and is consistent with the company's strategy to move aggressively into higher-value application services, said Joe Eazor, executive vice president for corporate strategy and business development at EDS.

Saber acquired the state and local practice of Covansys Corp., of Framingham, Mich., for $40 million in 2006. Saber said at the time of purchase that it was attracted to the Covansys unit because of its solid customer relationships and the potential its services and solutions offered for future growth.

Last year, about $3.3 billion, or 16 percent, of EDS' revenue came from U.S. government clients.

EDS, of Plano, Texas, ranks No. 10 on Washington Technology's 2007 Top 100 list of the largest federal government prime contractors.