Access to Digital Talent, Complementary
Capabilities Promise to Catalyze Growth
DXC Technology (NYSE: DXC) and Luxoft Holding, Inc (NYSE: LXFT)
today announced a definitive agreement for DXC to acquire Luxoft, a
global-scale digital innovator with differentiated offerings, deep
vertical industry expertise and world-class digital talent.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20190107005557/en/
Pursuant to the agreement between DXC and Luxoft, all of the
issued and outstanding Luxoft Class A and Class B ordinary shares
will receive $59.00 per share in cash, representing a total equity
value of approximately $2 billion.
Together, DXC and Luxoft will offer a differentiated customer
value proposition for end-to-end digital transformation by
combining Luxoft’s digital engineering capabilities with DXC’s
expertise in IT modernization and integration. The acquisition will
accelerate the digital growth and scale-out strategy outlined by
DXC at its Investor Day last fall, and will broaden access to key
digital talent.
Luxoft provides digital strategy consulting and engineering
services for companies across North America, Europe and the Asia
Pacific region. Headquartered in Zug, Switzerland, the company
achieved $911 million in revenue over the last four reported
quarters, with a strong, double-digit compound annual growth rate
(CAGR) over the last three years.
“Luxoft and DXC are highly complementary, and our shared vision
of digital transformation makes this strategic combination a great
fit for both organizations -- as well as enormously beneficial for
our clients,” said Mike Lawrie, chairman, president and CEO, DXC
Technology. “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.
The addition of Luxoft accelerates DXC’s growth strategy as we
equip the company to meet the digital requirements of our clients
today and in the future.”
A Digital Leader
Luxoft offers differentiated digital capabilities in areas such
as analytics, UX/UI, IoT and blockchain, and is a significant
player in outsourced engineering services, cloud and devops. Luxoft
brings strong vertical expertise in key industries, including
automotive (digital cockpit, autonomous drive, connected mobility),
financial services (digital consulting, regulatory &
compliance, platform implementation) and healthcare/life sciences
(digital lab, customer engagement). Luxoft also brings a strong
portfolio of other industry offerings for travel, media &
communications and energy & utilities.
Together, Luxoft and DXC will have industry expertise that is
both broad and deep. The combined company will be able to
offer:
- End-to-end digital capabilities for the
financial services industry, with a true global footprint;
- New services in insurance, where DXC is
a recognized industry leader;
- Unmatched offerings for the automotive
industry, combining Luxoft’s knowledge and experience in car
systems with DXC’s capabilities in cloud and security for connected
auto services; and
- Industry-leading services in healthcare
and life sciences, bringing together DXC’s experience in
specialized systems with Luxoft’s digital capabilities.
Luxoft has a highly skilled digital workforce of close to 13,000
people, the majority of whom have a master’s degree or PhD, along
with a deep industry background. The company built and operates a
unique talent acquisition and management platform that consistently
delivers on-time digital hiring, with an ability to leverage the
platform across DXC to improve hiring efficiency.
Luxoft serves marquee clients in every region, with particular
depth in European markets. In the automotive space, the combined
company -- Luxoft plus DXC -- will serve more than 20 manufacturers
and OEMs across North America, Europe and the Asia Pacific region.
The combined company will serve half of the top financial
institutions in the Americas and Europe.
Luxoft will maintain its brand and operate as “A DXC Technology
Company,” and will continue to be led by Dmitry Loschinin, the
company’s current president and CEO, who will report to Lawrie.
“Our success in recent years has been led by our talent and
ability to design, develop and deliver truly innovative digital
solutions tailored to client business needs,” Loschinin said.
“Aligning with DXC presents an exciting opportunity to unlock new
value for our people, clients and partners. We will gain the scale,
resources and market presence to better serve and compete, and to
more rapidly realize our vision. As part of DXC, we will preserve
Luxoft’s differentiated capabilities and culture while driving
growth for the combined company.”
Transaction Benefits
The acquisition of Luxoft will expand DXC’s digital offerings
portfolio, broaden its presence in high-growth verticals, enhance
access to engineering talent globally and strengthen DXC’s digital
value proposition overall. The focus of the transaction will be on
accelerating growth for DXC, with a focus on cross-selling digital
services, expanding into new markets and scaling digital
talent.
The combined company will benefit from Luxoft’s differentiated
solutions, platforms, delivery model and IP -- as well as
industry-leading partnerships that complement DXC’s own. Revenue
synergies are expected to come from cross-selling Luxoft offerings
across the DXC portfolio, while bringing DXC’s expertise in IT
modernization and digital integration to Luxoft clients.
About the Transaction
Closing of the transaction is anticipated by June 2019 and is
subject to customary conditions and regulatory approvals.
Shareholders representing approximately 83 percent of the total
voting power of Luxoft have delivered written consents in support
of the transaction, as a result of which the requisite Luxoft
shareholder approval has been obtained.
DXC expects the combination to be value accretive, driven by
complementary capabilities and offerings, differentiated solutions
for customers in large end-to-end digital transformations, a
consistent pipeline of digital talent, and access to fast-growth
verticals. Together, DXC and Luxoft will address the full spectrum
of business-driven digital initiatives, from modernizing legacy IT
systems to delivering transformational digital solutions at
scale.
Opportunities for Key Stakeholders
The combination of Luxoft with DXC will create new opportunities
for clients, employees, and partners:
- For clients, the combined
company will create a new, end-to-end digital transformation
proposition and integrated offers for key industry verticals. The
combined company will offer differentiated digital platforms that
integrate the best capabilities from both companies. Greater access
to digital talent will shorten project cycle times, and an expanded
delivery center footprint will bring digital capabilities closer to
clients.
- For employees, especially
designers and engineers, expanded end-to-end capabilities will
provide access to the latest technologies and innovations -- with
the ability to implement solutions at a global scale. The combined
company also will offer significant opportunities for professionals
to expand their digital skills, including access to the latest
certification programs from technology partners.
- And partners themselves will be
able to work with an independent company that combines the best
front-end digital capabilities with unmatched skills in IT
modernization and integration.
Conference Call Today
DXC and Luxoft senior management will host a conference call and
webcast today at 8:30 a.m. EST. The dial-in number for domestic
callers is (888) 220-8451. Callers who reside outside of the United
States should dial +1 (323) 794-2588. The passcode for all
participants is 2797121. The webcast audio and any presentation
slides will be available on DXC Technology’s Investor Relations
website.
A replay of the conference call will be available from
approximately two hours after the conclusion of the call until
January 14, 2019. Replay numbers can be found at the following
link. The replay passcode is also 2797121.
Guggenheim Securities and BofA Merrill Lynch acted as financial
advisors and Latham & Watkins LLP acted as legal counsel to
DXC, with Harney Westwood & Riegel LP acting as British Virgin
Islands counsel to DXC. Credit Suisse acted as financial
advisor and White & Case LLP acted as legal counsel to Luxoft,
with Conyers Dill & Pearman acting as British Virgin Islands
counsel to Luxoft.
About Luxoft
Luxoft (NYSE: LXFT) is a global technology services and
consulting partner that provides bespoke technology solutions to
customers in 22 countries across five continents. Founded in 2000,
Luxoft combines engineering excellence with deep industry expertise
to deliver and implement technology solutions that drive business
change. Through a combination of strategy, consulting and
engineering services, Luxoft’s global teams use technology to
enable business transformation, enhance customer experiences and
boost operational efficiency. With over 280 active clients, Luxoft
specializes in automotive, financial services, healthcare, life
sciences, telecommunications and other industries. For more
information, please visit www.luxoft.com and follow us
on Twitter and LinkedIn.
About DXC Technology
As the world's leading independent, end-to-end IT services
company, DXC Technology (NYSE: DXC) leads digital transformations
for clients by modernizing and integrating their mainstream IT, and
by deploying digital solutions at scale to produce better business
outcomes. The company’s technology independence, global talent, and
extensive partner network enable 6,000 private and public-sector
clients in 70 countries to thrive on change. DXC is a recognized
leader in corporate responsibility. For more information,
visit dxc.technology and explore THRIVE, DXC’s digital
destination for changemakers and innovators.
Cautionary Note Regarding Forward-looking Statements
All statements in this press release that do not directly and
exclusively relate to historical facts constitute “forward-looking
statements.” These statements represent DXC’s and/or Luxoft’s
intentions, plans, expectations and beliefs, and are subject to
risks, uncertainties and other factors, many of which are outside
DXC’s and/or Luxoft’s control, and no assurance can be given that
the results described in such statements will be achieved. Many
factors could cause actual results to differ materially from such
forward-looking statements with respect to the transaction
announced above including risks relating to the completion of the
transaction on anticipated timing, including obtaining regulatory
approvals, anticipated tax treatment, unforeseen liabilities,
future capital expenditures, inability to achieve expected
synergies, loss of revenues, delay or business disruption caused by
difficulties in integrating the businesses of DXC and Luxoft. For a
written description of risk factors that could cause actual result
in DXC’s and/or Luxoft’s business to differ materially from forward
looking statements regarding those matters, see the section titled
“Risk Factors” in DXC’s most recent Annual Report on Form 10-K,
DXC’s Quarterly Reports on Form 10-Q for the quarterly periods
ended June 30, 2018 and September 30, 2018, Luxoft’s most recent
Annual Report on Form 20-F and any updating information in
subsequent SEC filings, as well as the Information Statement to be
furnished by Luxoft on Form 6-K, once available. Each of DXC and
Luxoft disclaims any intention or obligation to update these
forward-looking statements whether as a result of subsequent event
or otherwise, except as required by law.
Additional Information
This communication is being made in respect of the proposed
acquisition of Luxoft by DXC. Because the proposed transaction has
already been approved by the requisite majority of Luxoft’s
shareholders, Luxoft will not be soliciting proxies or holding a
shareholder meeting in connection with the proposed transaction.
Luxoft will prepare an Information Statement for its holders of
ordinary shares describing the proposed transaction. When
completed, the Information Statement will be mailed to holders of
Luxoft’s ordinary shares and furnished to the SEC by Luxoft on Form
6-K. HOLDERS OF LUXOFT’S ORDINARY SHARES ARE ADVISED TO READ THE
INFORMATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE, BECAUSE THEY MAY CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE RIGHTS
OF SHAREHOLDERS. Holders of Luxoft’s ordinary shares may obtain a
free copy of the Information Statement to be furnished to the SEC
by Luxoft and other documents filed with or furnished to the SEC by
Luxoft at the SEC’s web site at http://www.sec.gov. Free copies of
Luxoft’s most recent Annual Report on Form 20-F, the Information
Statement on Form 6-K, once available, and each other document
Luxoft files with or furnishes to the SEC may also be obtained from
Luxoft’s Investor Relations website.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190107005557/en/
DXC Technology:Rich AdamonisCorporate Media Relations+1
862.228.3481radamonis@dxc.com
Jonathan FordInvestor Relations+1
703.245.9700jonathan.ford@dxc.com
Luxoft:Patrick CorcoranMarketing & Communications+1
631.478.2325pcorcoran@luxoft.com
Tracy KrummeInvestor Relations+1 212.964.9900,
x2460tkrumme@luxoft.com
Robert MaccabePublic Relations(t) +44 (0)20 3828 2346 (m) +44
7950 517 83rmmaccabe@luxoft.com
Luxoft Holding, Inc. (NYSE:LXFT)
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