CSC to sell credit services unit to Equifax for $1 billion
(Reuters) - U.S. technology services provider Computer Sciences Corp will sell its credit services unit to business information provider Equifax Inc for $1 billion in cash, and record after-tax proceeds of about $750 million to $800 million.
CSC's shares were up about 4 percent at $39.54 on the New York Stock Exchange, and those of Equifax were also up about 4 percent at $53.59 on Monday morning.
The credit services unit provides financial services and consumer credit information to the automotive industry, banks, retail establishments, mortgage companies, medical entities, and utilities in the United States.
Jefferies & Co analyst Jason Kupferberg said CSC's credit services business is extremely profitable.
"We'd expect the transaction to be dilutive, and it will also put more pressure on CSC's core IT solutions/services business to perform," Kupferberg wrote in a note to clients.
CSC, currently valued at about $5.91 billion, said the sale of its credit services unit would help it focus on its technology solutions and services business.
The company said the deal is expected to close this month. It intends to use about $300 million to $400 million of the proceeds to buy back shares, and contribute another $300 million to $400 million to its pension plans.
CSC's business solutions and services unit, which includes the credit services business, contributed 23 percent to its total revenue in 2012.
CSC had been losing money over renegotiating a multibillion-dollar contract with Britain's National Health Service. It hired Paul Saleh from Gannett Co as chief financial officer earlier this year.
CSC said in May it was looking to sell its "non-core" assets and would cut costs by $1 billion over the next 12 to 18 months.
Equifax has a valuation of about $6.13 billion.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Don Sebastian, Supriya Kurane)
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