Computer Sciences, DynCorp to merge
Published: 13 Dec 2002 15:10 GMT
Computer Sciences is to acquire DynCorp, a consultant to many US government departments.
Under the deal, expected to close in the first quarter, each DynCorp share will be exchanged for $15 in cash and $43 worth of Computer Sciences shares. Computer Sciences will also assume $273m of DynCorp's debt.
Privately held DynCorp recorded revenue of $2.3bn over the 12 months that ended on 26 September and has 23,000 employees worldwide. The company provides consulting services such as network integration and global defence logistics. According to the company's Web site, DynCorp's clients include more than 40 federal agencies, including the departments of defence, state, agriculture, energy and justice.
"With this transaction, we are seizing an opportunity to significantly strengthen our leadership position in the US federal marketplace, augment our capabilities to support the requirements of the new Homeland Security Defense Department and respond to the federal government's initiative to increase its reliance on service providers," Computer Sciences chief executive Van Honeycutt said in a statement.
Computer Sciences said it expects the deal to begin adding to the bottom line in fiscal 2004, except for a special transaction-related charge. When the deal is complete, Computer Sciences expects to get $6bn in revenue annually from its government business, which will have roughly 38,000 employees. Computer Sciences reported revenue of $11.4bn for fiscal 2002, with about $2.9bn of that derived from its government business.
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