The board of directors of Computer Sciences Corporation unanimously approved a plan to split its businesses into two, publicly traded companies.
The decision will position its businesses for long-term growth and leadership, according to Computer Sciences CEO Mike Lawrie.
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“CSC began its turnaround three years ago. That turnaround has progressed strongly, and our focus now turns to positioning the business for long-term growth and leadership,”said Lawrie in a statement.
He added, “The best way to accelerate that transformation is by separating the company into two businesses, each uniquely positioned to lead its market by focusing strongly on the needs of its clients.”
CSC Global Commercial & U.S. Public Sector businesses
Computer Sciences decided to separate its commercial business and public sector business after completing its turnaround initiative, and observing that the markets are evolving rapidly with different challenges and opportunities. The company also noted that its businesses have varying growth profiles and cash flow dynamics.
The board of directors of the company believed that separating its businesses is the next step of its turnaround as it focuses on growth. Both businesses are expected to function as pure plays that concentrate on its respective customer segments.
The CSC Global Commercial will operate as a trusted information technology (IT) services and solutions partner for Fortune 1,000 companies and non-U.S. government clients. It will leverage its expertise in consulting, infrastructure and industry to lead customers to their digital transformation. It will have more than 1,000 customers, 34 delivery centers, and 51,000 employees globally. The business generated $8.1 billion in revenue for the fiscal 2015.
The CSC U.S. Public Sector will become the top three providers of mission-specific IT, infrastructure, and businesses services to federal, state, and defense agencies of the United States. It will also serve as the leading IT services provider to national security. It generated $4.1 billion in revenue for the fiscal 2015.
Computer Sciences shareholders will receive a special cash dividend
Computer Sciences said its shareholders will receive a special cash dividend of $10.50 per share after the closing of the separation of its businesses. The company expects to close the deal by October 2015.
Computer Sciences will operate on a business as usual basis while finalizing the details of the separation.
Lawrie said, “The progress we’ve made, coupled with the changing demands of the market, make this a good time to give these two businesses room to thrive as independent companies, able to move decisively to capture the opportunities in front of them.”