Computer Sciences expands scope with acquisition
The company acquires IT services firm Nichols Research to enhance its position in the U.S. federal, health care, and commercial markets.
Computer Sciences (CSC) said the merger with Nichols will enhance its position in the U.S. federal, health care, and commercial markets. The El Segundo, California-based firm competes against EDS, IBM Global Services, and Unisys in the computer services field.
Nichols has approximately 3,000 employees and annual sales of $455 million. To date, the company, based in Huntsville, Alabama, provides computer services and consulting to the U.S. Army, Air Force, Navy, and other intelligence agencies, the companies said.
In addition, CSC said it will be able to tap Nichols's expertise in the claims processing and applications outsourcing area for the health care industry through an Internet-based network Nichols uses. Nichols also supports a wide range of health insurance and provider organizations in the managed care and practice management units of the market, CSC said.
CSC said it will combine Nichols's three business units into its Federal Sector, Health Care Group, and Consulting Group.
Under the agreement, each share of Nichols will be converted into .423 shares of CSC. At an exchange ratio of .423, Nichols stockholders will receive approximately 6 million shares of CSC, which had a value of $391 million based on CSC's closing price on Friday. CSC said it also will assume all of Nichols's outstanding stock options at the same exchange ratio.
The deal, which has been unanimously approved by both companies' boards of directors, requires approval by Nichols's shareholders as well as traditional regulatory approval, the companies said.