Australian-listed IT and business solutions company UXC has received a proposal from global IT services provider, Computer Sciences Corp (CSC), to purchase the shares of UXC Limited, for a total of approximately AU$428 million.
According to the companies, the agreed-upon price would be AU$1.26 per share for UXC's 340 million outstanding shares, the values of which see the approximate purchase price at AU$428 million.
"The board of UXC has determined that it is in the interests of its shareholders to engage further with CSC with a view to finalising an agreement to implement the proposed transaction," UXC said in a statement. "CSC has been granted a five week period of exclusive due diligence."
Cris Nicolli, managing director of UXC, said the combined CSC-UXC would be among the region's largest IT services companies, based on revenues.
"The proposal from CSC recognises the potential of UXC and is a testament to the strong business we have built; the board of UXC is supportive of this move," Nicolli said. "All of us at UXC are tremendously proud of what we've achieved to date, and the proposal from CSC represents a potential next stage in the evolution of our company."
UXC told shareholders that under the terms of the proposal, UXC shareholders would receive cash payments of $1.28 per share, comprising $1.26 cash per share and the payment of a franked dividend of 2c per share for the half year ending December 31, 2015.
UXC said the proposal remains subject to several conditions, including completion of due diligence to CSC's satisfaction, agreeing a scheme of arrangement, respective board approvals, and the usual regulatory conditions.
The transaction is expected to conclude by February 2016.
In August, CSC announced two strategic acquisitions, which included service-management technology provider, Fruition Partners; and London-based Fixnetix, provider of front-office managed trading software for capital markets. The financial terms of the deals were not disclosed by CSC.
In May, CSC announced that it planned to split into two separate publicly traded companies, with one focused on commercial businesses and another focused on the public sector.
For the financial year ending June 30, 2015, UXC posted earnings before tax of AU$42.1 million, as well as a net profit after tax of AU$23.1 million, and AU$686.4 million in revenue.
Melbourne-based UXC signed a three-year contract with New South Wales-owned electricity infrastructure companies Ausgrid and Endeavour Energy in July. The AU$25 million service desk and computing support services agreement extended UXC's existing relationship with Ausgrid, which it has been serving in an IT capacity since 2003.
In August, UXC signed a three-year AU$12 million annuity cloud-based contract with water treatment and chemical distribution company, Ixom.
In its end of financial year statement, the company told shareholders it also signed over AU$100 million in contracts, however, the company has not said who these deals were with.