Computer Sciences Corporation (CSC) is a global technology company offering a broad array of professional services to clients in commercial and government markets globally.
The company has entered into an agreement to acquire all of the outstanding equity of iSOFT Group Limited (“ISF”), the world’s largest provider of advanced health care information technology (IT) solutions. The acquisition has been approved by the court.
iSOFT is expected to augment CSC’s market-leading software products, help in health care integration and enrich its services portfolio.
Moreover, the acquisition will enhance CSC’s growth prospects in the Life Sciences market and also help it grab a higher share of the health care IT market. The deal is expected to be completed during the second quarter of fiscal 2012.
Although the deal value has not been disclosed, iSOFT has been offered 17 cents per share in cash. The market responded positively, with CSC shares rising 1.0% to $49.37 in the New York Stock Exchange.
This technical collaboration will offer advantages in the Healthcare IT segment for both entities, and enable end customers to increase their revenue base and operational efficiency. We believe this will enhance its customer base as CSC will now be able to penetrate deeper into the health care market.
Strategic alliances, major deal wins, product enhancement and positive macroeconomic developments are helping the company to enhance its business prospects. Moreover, CSC is quite active on the acquisition front. In August 2009, CSC completed the acquisition of BearingPoint’s operations in Brazil. The acquisition has augmented CSC’s multi-year strategic growth plan by expanding its presence in Brazil.
This apart, the operation has enhanced CSC’s ability to support existing customers with a presence in Brazil, gain additional new clients from BearingPoint and position it to pursue and win new businesses in the region.
The company is constantly enhancing its services portfolio and expanding operations in new markets. It has a steady flow of new businesses, especially in the government vertical and is financially sound. While things look good, we are a tad apprehensive about intense competition in the IT and cloud computing space from both big and small players such as Accenture (ACN) and Hewlett-Packard Company (HPQ).
Moreover, the company’s high exposure to government contracts will likely need diversification, as the government may streamline its IT budget.
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