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CSC to buy Covansys for $1.3 bn

April 26, 2007 18:21 IST

The US-based IT company Computer Sciences Corp. will buy rival Covansys for $1.3 billion in an all-cash deal and double its staff in India to 14,000.

The acquisition increases CSC's India delivery capabilities and accelerates development of strategic offshore offerings, a joint statement of the two companies said.

"Computer Sciences Corporation and Covansys Corporation have entered into an agreement under which CSC will acquire Covansys for $34.00 per share in an all-cash transaction.

The transaction is valued at approximately $1.3 billion, and is expected to be earnings per share neutral to CSC during the first 12 months," CSC said in statement.

Both the companies' operations in India have been ranked among the top 10 places to work for IT professionals in India.

The acquisition approximately doubles CSC's work force in India to about 14,000. The Michigan-based Covansys' has 6,400 employees in India.

"This acquisition furthers CSC's strategic goals of increasing shareholder value and growing our business both organically and by acquisition," said CSC Chairman and chief executive officer Van B Honeycutt.

"With this action, we are significantly strengthening our capabilities and presence in India as well as creating an additional market channel for our industry, consulting and outsourcing solutions."

"We believe this is an outstanding transaction for our shareholders, clients and employees," said Raj Vattikuti, president and CEO of Covansys.

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