DXC Technology of Tysons, VA announced on October 11 that its board of directors has unanimously approved a plan to combine its U.S. Public Sector (USPS) business with Vencore Holding Corporation and KeyPoint Government Solutions to form a separate, independent publicly traded company to serve U.S. public sector clients.
Both Vencore and KeyPoint are currently owned by affiliates of Veritas Capital, a leading private equity firm recognized for its in-depth knowledge and understanding of government and technology-enabled end markets. Veritas Capital will remain an investor in the new company.
The formation of the new company is expected to be completed by the end of March 2018, subject to regulatory and other approvals.
“Clients and investors in both the commercial and public sectors are recognizing the higher value of IT service providers with scale and differentiation,” said Mike Lawrie chairman, president and CEO of DXC. “Separating our global commercial and USPS business, and combining it with Vencore and KeyPoint, will accelerate transformation with two strategically focused companies, each uniquely positioned to lead its market by prioritizing the needs of its clients.”
The combination of USPS with Vencore and KeyPoint will create a top 5 services provider to the U.S. government, offering differentiated, mission-driven solutions in cybersecurity, big data analytics, cloud engineering, enterprise IT services, and systems engineering – all enabled by a portfolio of cutting-edge intellectual property (IP).
The new company will be a strategic partner to the federal government in solving the most demanding informational and national security challenges and driving technology modernization. With approximately $4.3 billion in combined revenues and a highly skilled workforce of more than 14,000, the new company will serve a robust base of established and non-overlapping clients based on long-standing relationships.
The new company will provide meaningful scale and end-to-end technology solutions, leveraging a full spectrum of offering families and industry expertise to ensure broader access to customers, capabilities and contract vehicles. The new company’s name will be determined at a later date.
“The combination of USPS’s enterprise IT leadership with Vencore’s deep mission understanding and advanced innovation will provide unmatched differentiation in the market,” said Ramzi Musallam, the CEO and managing partner of Veritas Capital. “This new company will have the unparalleled expertise and breadth of capabilities to make it the trusted partner of choice supporting U.S. government clients with their most critical missions.”
Mac Curtis, president and CEO of Vencore, will become the chief executive officer of the new company. Marilyn Crouther, senior vice president and general manager, DXC USPS, will become the new company’s chief operating officer. Mike Lawrie will chair the board of the new company. Additional members of the new company’s senior management team will be drawn from DXC, Vencore and KeyPoint and will be named at a later date as integration planning progresses.
“Given our highly-skilled technical talent, differentiated innovation, and decades of strong customer relationships, I am excited to lead our combined company in its next stage of growth,” Curtis said. “We will leverage our deep mission domain knowledge, leading-edge IP and comprehensive suite of IT solutions to address larger markets and intensify our focus on meeting our clients’ needs in a rapidly changing and attractive marketplace.”