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DXC Technology bids $2bn for Swiss big cheese Luxoft
Alles ist gut
DXC Technology has negotiated terms to buy fellow New York Stock Exchange-listed tech services and consulting group Luxoft for $2bn.
The agreement means that all issued and outstanding Luxoft Class A and Class B ordinary stockholders will get $59 per share in cash, assuming the transaction leaps any regulatory hurdles.
The splurge is all part of DXC's attempt to squeeze itself more deeply into vertical sectors – in October it bought Molina Medicaid Solutions to build a bigger business in tech healthcare.
With his bingo buzzword count in mind, DXC CEO Mike Lawrie issued a prepared remark: "Luxoft has a proven track record and expertise in producing measurable business outcomes at-scale [sic] for global clients across key industries, including automotive and financial services."
DXC already sells cloud and security services for "connected auto services".
Headquartered in Switzerland, Luxoft sells outsourced engineering services, cloud and DevOps. In addition it flogs consulting on analytics, UX/IX and – drumroll – blockchain (of course it does).
In fiscal '18 ended 31 March, Luxoft turned over $906.8m, up 15.4 per cent year-on-year and reported net profit of $57m, down 9 per cent. In Q1 and Q2 of this financial year, it reported sales of $212.8m and $228.4m respectively and falling profits for both periods.
Luxoft employs 13,000 people and some of those could be forgiven for receiving today's agreement with some trepidation. DXC has managed to wave bye to 40,000 staff since it formed in April 2017 with relentless redundancy programmes.
The Luxoft brand will remain and CEO Dmitry Loschinin will continue to run the business, reporting to Lawrie. The deal is expected to conclude in June. ®