DXC Technology has announced its intention to acquire software development firm Luxoft for approximately $2 billion.
DXC said the acquisition will accelerate its digital growth and scale-out strategy, and will also broaden access to digital talent, with Luxoft currently boasting a workforce of close to 13,000 people.
Under the terms of the deal, all of the issued and outstanding Luxoft Class A and Class B ordinary shares will receive $59 per share in cash.
Founded in Russia, and headquartered in Zug, Switzerland, Luxoft provides digital strategy consulting and engineering services for companies across North America, Europe, and the Asia Pacific region.
The company plays in the analytics, UX/UI, Internet of Things, and blockchain spaces, and also has its hands in outsourced engineering services, cloud, and DevOps.
DXC reported Luxoft made $911 million in revenue over the last 12 months.
“Luxoft and DXC are highly complementary, and our shared vision of digital transformation makes this strategic combination a great fit for both organisations — as well as enormously beneficial for our clients,” DXC Technology chairman, president, and CEO Mike Lawrie said.
“Luxoft has a proven track record and expertise in producing measurable business outcomes at-scale for global clients across key industries, including automotive and financial services.”
New offerings on the agenda for DXC following the closure of the Luxoft deal will see the company target the financial services, insurance, healthcare and life sciences, and automotive sectors — specifically around cloud and security for connected auto services.
Luxoft will have ‘A DXC Technology Company’ appended to its name, and will continue to be led by current president and CEO Dmitry Loschinin, who will report to Lawrie.
Shareholders boasting 83 percent ownership of Luxoft will now need to vote on the deal, and subject to regulatory approvals, it should close in June 2019.
DXC Technology was formed in April 2017 as the result of the merger of Computer Sciences Corp (CSC) and the Enterprise Services arm of Hewlett Packard Enterprise (HPE).
At the closure of the deal, the new $26 billion IT services giant boasted nearly 6,000 clients in more than 70 countries, with the combined companies claiming only a 15 percent overlap in accounts.
For the second quarter of fiscal 2019, DXC reported $259 million in income from continuing operations, with Q2 EBIT of $382 million.