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Thursday 22 September 2022

PE suitors eye DXC Technology

DXCAccording to reports in the media, US technology giant, DXC, has appointed advisers having received interest from a third-party regarding a possible takeover. Although DXC has not issued any official statement, the firm’s share price initially rose by around 7% on a report by Bloomberg that an unnamed private equity organisation had expressed interest in a potential deal.

DXC, which has a current market capitalisation of approximately $6.5bn has previously rejected at least one public takeover bid when the company declined an unsolicited $10bn approach from Atos early in 2021 (see: Running the rule over Atos and DXC Technology).

In the UK, DXC has enjoyed some high-profile wins recently, with the company having greatly improved its reputation for service and delivery since the arrival of current CEO Mike Salvino. DXC’s turnaround in respect of its overall financial performance has however been far less successful, with the company still struggling to demonstrate any top-line revenue growth.

In its most recent full year, DXC’s global revenue fell by 8.3% to $16.3bn with the decline in sharp contrast to one of the most buoyant periods in recent history for the SITS market. Rumours of a possible bid at this time are interesting with DXC clearly having cleaned house significantly under Salvino's stewardship. Although the promise of "jam tomorrow" still prevails in respect of revenue growth, DXC's backers may possibly be starting to feel that it is now time for a different approach. 

Posted by: Jon C Davies at 08:36

Tags: M&A   DXC   acquisitions  

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