DXC Stock Soars After Firm Calls For ‘Strategic Alternatives’
.jpg)
DXC Technology's stock price skyrocketed by more than 18 percent on Tuesday, the day after the company disclosed plans to pursue “strategic alternatives” for three of its businesses.
DXC’s share price peaked Tuesday early afternoon at $35, up sharply from Monday's close of $29.40 per share, before moving a bit lower to about $34.50 per share late in the day.
The Tysons, Va.-based global solution provider formed in the 2017 merger of HPE Enterprise Services and CSC on Monday said it was exploring strategic alternatives for three of its businesses.
CEO Mike Salvino listed those three businesses as DXC's U.S., state, and local health and human services business; its horizontal BPS (business process services) business; and its workplace and mobility business.
These three businesses together account for about 25 percent of DXC's total revenue, Salvino said.Salvino, who in September joined DXC Technology, told investors during the company’s second quarter 2020 financial conference call those so-called strategic alternatives include a potential sale to strategic or private equity buyers or a spin-off.
"These businesses are strong," he said. "Our workplace and our U.S., state, and local health and human services businesses are market leaders. And we have meaningful IP (intellectual property) in our horizontal BPS business."
DXC expects it can generate net capital proceeds of about $5 billion for the three businesses, said Paul Saleh, executive vice president and chief financial officer at DXC Technology. Of that, DXC expects to deploy $4.25 billion or more to repurchase shares and pay dividends over the next 10 quarters, Saleh said.
DXC’s share price during the year fell as DXC weathered three major legal battles including one based on alleged management fraud, a fight with its former parent company Hewlett Packard Enterprises over an expected payment, and the replacement of its CEO.
The planned divestment of the three businesses will likely initially be a negative to DXC's credit rating given that those businesses have a higher margin profile than DXC as a whole does, according to a Tuesday report from Moody’s Investors Service.
However, Moody's said, the shift in strategy will mean DXC will be better able to turn around its declining top line and react to IT industry changes.
"DXC has been slower than other competitors, such as Accenture (Aa3 stable) or Cognizant, to react to an evolving IT services landscape but we believe the scale and depth of its customer relationships provide an opportunity to reposition the company and return to long-term growth," Moody's wrote.
source crn
Industry: Information Technology

Latest Jobs
-
- OUTSIDE IR35 Contract- Functional tester- SC clearance Microsoft Windows Server
- London
- Outside IR35 contract
-
Front End Functional tester with SC clearance needed for an Outside IR35 project. Current valid SC clearance is required Experience with functional testing with exchange, sharepoint, SQL and other applications relating across a windows server Migration to 2019. Must be able to get to Central London 3 days a week. Jira, Wiki documentation and automation experience highly desirable.
-
- ForgeRock Consultant- UK
- United Kingdom
- Upto £100,000 plus benefits
-
ForgeRock Consultant/ Architect is require for niche consultancy who are looking to expand their presence within the UK/European Market Looking for a lead IAM architect, ideally with ForgeRock experience but would consider other vendors, But looking for someone who is able to advice and consultant with Clients but have the implementation background so they can get involved in projects as and when needed. Key duties will be: Provider IAM consultancy to clients, with a focus on ForgeRock Product stack ·Responsible for the design and implementation of ForgeRock solutions ·Install and configure ForgeRock stack to meet customer authentication and authorization requirements, ·Design and implement OAuth2 protocol using ForgeRock OpenAM, ·Design and develop OpenAM custom authentication modules, ·Configure ForgeRock stack to protect RESTful API, ·Troubleshoot and support ForgeRock IAM stack. This is a great role to join a niche play as they look to kick of their European expansion
-
- ForgeRock Consultant- Netherlands
- Netherlands
- N/A
-
ForgeRock Consultant required for 6 Month Contract This will be a mix of on site and home based, so need people to be based in the Netherlands We are looking for a lead ForgeRock Technical Consultant/ Architect with strong experience of ForgeRock to lead a new deployment project. ·Responsible for the design and implementation of ForgeRock stack ·Install and configure ForgeRock stack to meet customer authentication and authorization requirements, ·Design and implement OAuth2 protocol using ForgeRock OpenAM, ·Design and develop OpenAM custom authentication modules, ·Configure ForgeRock stack to protect RESTful API, ·Troubleshoot and support ForgeRock IAM stack. ·Designed and developed Restful APIs, This is a great project with an expanding leading IAM player within Europe, We are looking for someone with the above experience, who is comfortable hitting the ground running and taking on the reins at the start of a project