DXC Technology Confirms Takeover Bid From a “Financial Sponsor”

US IT/BPO firm DXC Technology is in talks with a “financial sponsor” reportedly interested in purchasing the Virginia-based firm.

DXC confirmed that it has been approached, though it did not disclose the name of the suitor. Reports point to Baring Private Equity, an Asian private equity firm that counts several technology and business services firms in its portfolio.

Tech companies are growing more attractive in the eyes of private equity, as rising inflation and the tech talent shortage squeeze the value of their shares.

DXC’s share price, for example, has fallen from US$96 per unit to US$26 over the past five years, largely due to its high levels of debt and the decreasing demand for traditional IT infrastructure services. Its market value shrunk from US$24 billion in fiscal 2018 to US$16.26 billion in fiscal 2022.

Earlier this year, reports emerged that French IT giant Atos made a bid to acquire DXC Technology. The US firm turned down the offer, saying the number proposed was too low.

DXC Technology was formed in 2017 following the merger of Computer Science Corp. and the Enterprise Services business of Hewlett Packard Enterprise. It expanded two years later with the acquisition of Luxoft, which employed thousands of people in Europe and the Americas.

Although its IT infrastructure business is bleeding, DXC remains a significant service provider for US insurance and aerospace companies.