CSC to acquire Xchanging for £480m following intense bidding war

Business processing firm Xchanging is set to be swallowed up by a US-based IT and professional services giant.

Computer Sciences Corporation (CSC) will acquire Xchanging for £480m (around $720m) in a deal that will see the Virginia-headquartered firm pay £1.90 in cash per share to Xchanging’s stakeholders.

CSC managed to beat rival outsourcing giant Capita to the acquisition. The latter firm had hoped to acquire Xchanging for £412m.

TechMarketView analyst John O’Brien said earlier this month: “Shareholders have failed to give Capita full backing because of the significant discount of its offer versus the potential bids from CSC and Ebix.

“Indeed the bidding war has been great news for Xchanging’s share price, which has risen steadily.”

He added: “Shareholders have failed to give Capita full backing because of the significant discount of its offer versus the potential bids from CSC and Ebix. Indeed the bidding war has been great news for Xchanging’s share price, which has risen steadily

According to Insurance Business Review, CSC is pursuing the deal to combine its knowledge in business process outsourcing, IT services and insurance with Xchanging’s expertise and software applications, potentially strengthening its services in the commercial insurance industry.

Mike Lawrie, the president and CEO of CSC, said: “Xchanging’s capabilities and experience in the commercial insurance market would complement CSC’s global insurance presence in software, outsourcing and services.

“I look forward to welcoming Xchanging to the CSC family as we continue to grow our insurance business and invest in our differentiated next-generation solutions.”

The acquisition will also enable CSC to offer a more modern suite of insurance platforms for its customers, according to Insurance Business Review, as well as allowing the firm to expand its offering with the introduction of wealth management outsourcing services.

The transaction is due for completion in the next six months, subject to regulatory approval.

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