Qioptiq logo Raytheon Global MilSatCom

COMPUTER SCIENCES TO ACQUIRE DYNOCORP

13 Dec 02. Computer Sciences Corporation (NYSE: CSC – News) and DynCorp today announced that they have entered into a merger agreement providing for the acquisition of DynCorp by CSC. The transaction is valued at approximately $950m, including the assumption of all of DynCorp’s debt, which was $273m of principal amount on Sept. 26, 2002. Upon consummation of the merger, each DynCorp share will be converted into $15 in cash and $43 in market value of CSC shares.

The transaction requires approval by the holders of a majority of the approximately 11 million outstanding DynCorp shares as of Sept. 26, 2002, and is subject to customary conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

The terms of the acquisition have been approved unanimously by the boards of directors of both companies. CSC expects to conclude the transaction during the first calendar quarter of 2003, and expects the acquisition to be accretive to earnings for fiscal 2004 excluding the impact of a special charge related to the transaction.

“This action 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 transaction, we are seizing an opportunity to significantly strengthen our leadership position in the U.S. federal marketplace, augment our capabilities to support the requirements of the new Homeland Security Department and respond to the federal government’s initiative to increase its reliance on service providers.

“Anticipated synergies to be realized following completion of this acquisition will further enhance the value of DynCorp’s assets and provide benefits to CSC’s shareholders,” Honeycutt added.

DynCorp, with revenues of $2.3bn for the 12 months ended Sept. 26, 2002, is among the largest employee-owned information technology and outsourcing firms headquartered in the U.S. The company, which employs more than 23,000 technology and technical professionals at more than 550 locations globally, focuses on the large defense, security and civil markets. Services include systems and network integration, high-tech range operations, global defense logistics and maintenance services and contingency support, homeland security services, and infrastructure management of critical defense assets.

DynCorp will become part of CSC’s Federal Sector unit, which currently has approximately 15,000 employees and is headquartered in Falls Church, Va. The combined organizations will provide significantly greater scale to CSC’s presence in the U.S. federal marketplace. When the acquisition is completed, CSC will derive approximately $6 billion in annual revenue from the federal government (based upon estimated fiscal 2003 year-end revenues) and have nearly 38,000 people serving the U.S. government globally.

Back to article list