Monday, October 24, 2005

Mon - Buy-out groups examine Computer Sciences

Private-equity firms are looking to buy out Computer Sciences Corp., an outsourcing giant with more than $14 billion in annual sales and an $8.4 billion market value.

The firms looking at Computer Sciences include Texas Pacific Group, Warburg Pincus and Blackstone Group. The firms say the takeover plans remain in the early stages of development, and no deal may materialize for the 46-year-old El Segundo, Calif.-based company.

The company could provide some break-up potential as about a third of its revenues come from large, long-term government and military outsourcing deals. The rest of CSC's revenues come form the corporate sector with a mix of sytems integration and consltancy revenues as well as some outsourcing contracts.

Perhaps one of the buy-out groups should consider teaming up with a strategic partner such as a Dell, HP or even Sun that could benefit from developing the services part of their business further.

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