CSC to sell parts of DynCorp

Computer Sciences Corp. has entered into a definitive agreement to sell selected DynCorp business units for $850 million to private equity investment group Veritas Capital Management LLC, CSC said today.

The El Segundo, Calif., contractor will sell its DynCorp. International and DynMarine units along with selected DynCorp Technical Services contracts to Veritas of New York Of the $850 million, Veritas will pay $775 million in cash at closing plus $75 million in senior preferred stock.

DynCorp International, combined with the other units being divested, provides Defense Department aviation maintenance; physical and personal security services; drug eradication services; and shipboard logistics, training and staffing services to the federal government and international clients.

The units being sold employ approximately 14,000 workers worldwide and had combined revenue of $1.6 billion for the 12 months ended Oct. 1. The deal is expected to be completed during CSC's fiscal quarter ending April 1, 2005.

CSC bought DynCorp in March 2003 for approximately $914 million. The business units included in this transaction represented about 37 percent of total DynCorp revenue of more than $2.5 billion at the time of the DynCorp acquisition. With the new transaction, CSC is divesting about 23 percent by dollar volume of its federal government pipeline of business.

The deal will let CSC continue to concentrate on providing core information technology, engineering and professional services to the federal government, as well as supply additional capital resources, said Van Honeycutt, CSC's chairman and chief executive officer.

CSC expects to record a non-recurring, pre-income tax gain of more than $400 million. The company may use the $775 million cash, minus transaction costs, to pay off debt, repurchase CSC common shares, fund acquisitions and pay for other general corporate purposes, the company said.

CSC is No. 3 on Washington Technology's 2004 Top 100 list of federal contractors, ranked according to their prime IT contracting revenue. The company employs approximately 91,000 workers and had revenue of $14.8 billion for the fiscal year ended April 2.


Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close

Trending

  • Dive into our Contract Award database

    In an exclusive for WT Insider members, we are collecting all of the contract awards we cover into a database that you can sort by contractor, agency, value and other parameters. You can also download it into a spreadsheet. Our databases track awards back to 2013. Read More

  • Navigating the trends and issues of 2016 Nick Wakeman

    In our latest WT Insider Report, we pull together our best advice, insights and reporting on the trends and issues that will shape the market in 2016 and beyond. Read More

contracts DB

Washington Technology Daily

Sign up for our newsletter.

I agree to this site's Privacy Policy.