Business technology and services provider Xchanging’s board of directors today agreed to be purchased by US-based digital consultancy company Computer Sciences Corporation (CSC).
CSC’s cash offer of 190p per share, which is worth about £480m, beat out an offer of 160p per share from outsourcing giant Capita, which had also shown an interest in buying Xchanging.
The deal will help Xchanging reach a more global client base, while CSC will benefit from access to Xchanging’s Xuber platform, which is an insurance software solutions provider and counts Hiscox and RSA as customers.
Shares in the British company have rocketed up over 9 per cent, reaching 194.5p at around midday – the highest the shares have traded at in five years.
“CSC leads clients on their digital transformation journeys,” said Mike Lawrie, president and chief executive of CSC. “Xchanging’s capabilities and experience in the commercial insurance market would complement CSC’s global insurance presence in software, outsourcing and services. I look forward to welcoming Xchanging to the CSC family as we continue to grow our insurance business and invest in our differentiated next-generation solutions.”
Goldman Sachs is acting as CSC’s financial advisor, while Allen & Overy is acting as legal advisor.
Meanwhile, Xchanging's advisory team consists of Lazard, Investec Bank and Liberum Capital.
The deal is expected to close in the next six months, subject to regulatory approval.
Earlier this year, Xchanging found itself in a spot of bother when its interim results revealed that revenue had tailed off by 2.8 per cent to £199m and chief executive Ken Lever would say goodbye to the company at the end of the year, resulting share price plummeting almost 22 per cent.