DXC to combine U.S. public sector business with Vencore and KeyPoint

By Marjorie Censer / October 12, 2017 at 9:43 AM

DXC Technology, the company created by combining Computer Sciences Corp. with Hewlett Packard Enterprise's enterprise services business, this week unveiled a plan to bring together its U.S. public sector unit with Vencore and KeyPoint Government Solutions.

The deal, which would be structured as a Reverse Morris Trust transaction, merges the DXC business with two companies owned by private-equity firm Veritas Capital, which will remain an investor in the new, publicly traded company. The resulting company is expected to be established by the end of March.

The combination “will create a top five 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,” DXC said.

The new company would have about $4.3 billion in sales and more than 14,000 employees. Its name is yet to be determined.

Mac Curtis, chief executive of Vencore, is set to become the new company's chief executive, while Marilyn Crouther, general manager of DXC's U.S. public sector unit, has been tapped to serve as chief operating officer. Mike Lawrie, DXC's CEO, will chair the new company's board.

DXC was formed earlier this year. In 2015, Computer Sciences Corp. split into two parts and its U.S. public sector business was merged with SRA International to create CSRA.

Vencore, which has about 3,750 employees and is based in Chantilly, VA, was also created through transactions. It combined Lockheed's former Enterprise Integration Group with QinetiQ North America's services and solutions group. The company this summer indicated it planned to go public.

The Loveland, CO-based KeyPoint, with about 3,500 workers, is known for providing background investigative services to the government.