Wheeling And Dealing: CSC To Buy $480M Australian IT Giant As It Readies For Split

CSC has notched its fourth merger or acquisition in the buildup to its November split, unveiling plans to purchase Australia's largest IT services company for about $300 million.

The Falls Church, Va.-based company, No. 5 on the CRN Solution Provider 500, plans to close in February on an acquisition of UXC Ltd., a 3,000-employee, $480 million IT application, infrastructure and consulting firm.

This is the third acquisition announced since August by CSC's $8.1 billion commercial business, which will separate next month from CSC's $4.1 billion U.S. public sector business. CEO Mike Lawrie said in August that the CSC's commercial business is considering an array of acquisition opportunities to help facilitate the move from legacy projects such as ERP installations to next-generation cloud and big-data offerings.

[Related: CSGov-SRA Monster Merger Creates $5.5B Public Sector Giant]

UXC is in the top 1 percent of Microsoft Dynamics resellers worldwide, and also has strong relationships with Oracle, SAP and ServiceNow in Australia and New Zealand, according to the company's website.

CSC has proposed paying 89 cents for each of UXC's 340 million outstanding shares, or roughly $300 million total. UXC is trading on the Australian stock exchange at the equivalent of 94 U.S. cents per share.

The deal is subject to a five-week due diligence process, respective board approvals and Australian regulatory and court approvals, according to the companies. CSC declined to comment for this story.

UXC has three business groups, according to its website: a 1,600-person enterprise application practice focused on strategy and design, project management, testing and application support; a 650-employee IT infrastructure group focused on cloud, data center, enterprise mobility and managed services; and a 550-worker consulting practice focused on research, analytics, communication and cybersecurity.

According to the company website, as of November 2014, UXC Eclipse, the North American branch of UXC Ltd., employed 230 people in Calgary, Alberta; New York; Phoenix; Seattle; Toronto; and Vancouver, B.C.

The company has been active in M&A, buying the following firms: Australian digital and e-commerce firm White Labelled in October 2013; Australia-based ServiceNow powerhouse Keystone in November 2013: U.S.-based Microsoft Dynamics superstar Tectura in December 2013; Australian cybersecurity presence Saltbush Group in October 2014; and Australian SAP player Contiigo in May.

UXC will join managed trading solutions provider Fixnetix of London and Fruition Partners, a 300-person, cloud-based service management firm based in Chicago, as recent additions to CSC's commercial business. The Fixnetix and Fruition deals were both disclosed in August and are expected to close later this year.

Computer Sciences Government Services, or CSGov, has also gotten in on the M&A action, announcing a merger in August with $1.4 billion public sector competitor SRA. CSGov shareholders will own 85 percent of the new company, with SRA shareholders receiving $390 million in cash as part of the deal.

Lawrie said in August that CSGov has its plate pretty full, and told investors not to expect any additional M&A activity from that business unit in the near future.

PUBLISHED OCT. 5, 2015