Report: HP Passed On CSC Buyout Deal

Before CSC's announcement of a split last month, the $12.2 billion solution provider was "nearing a deal" with Hewlett-Packard, according to a report Thursday afternoon from Bloomberg.

Bloomberg said the two companies worked on a deal for "several months" before the talks "broke down." HP does not intend to return to the negotiation table with CSC, according to Bloomberg.

Both HP and CSC declined to comment.

[Related: CSC Dealt Huge Break By SEC In Accounting Fraud Case: Report]

CSC's market value is an estimated $9.6 billion, compared with HP's $60 billion, and would have been the biggest acquisition HP has made since 2011, when the Palo Alto, Calif.-based IT vendor acquired Autonomy for $11.7 billion.

CSC has been rumored to be seeking a buyout for quite some time. Reports emerged in late September that the company was exploring leveraged buyout options with multiple private equity firms, including Blackstone Group and Bain Capital.

In late February, Reuters reported that CSC was being pursued for a sale to private equity firm Carlyle Group and fellow solution provider behemoth Capgemini. A sale of CSC would have been the largest leveraged buyout since Dell went private for $16 billion in 2013. CSC is No. 4 on CRN's 2014 Solution Provider 500 list.

HP and CSC both recently showed their cards in their intentions to split into two separate companies.

In CSC's case, it will split into two publicly traded businesses, one focused on its $8.1 billion commercial business, and the other focused on its $4.1 billion U.S. government offerings. The Falls Church, Va.-based solutions provider announced its intentions on earnings night May 19, and expects the split to be finalized Oct. 25.

As for HP, it announced in October that it will separate its PC and printer business from its hardware and services business. The split will take place Nov. 1.

Two days after CSC's announcement of a split, HP revealed to Wall Street analysts that it is aiming to take $2 billion in costs out of its beleaguered $22.3 billion enterprise services business.

PUBLISHED JUNE 4, 2015