CSC to buy Xchanging for £480m

Capita left out in the cold as Xchanging agrees deal for 190 pence a share

The latest object of Capita's desire, UK business process services firm Xchanging, has snubbed the UK public sector giant by agreeing a sale to rival bidder CSC.

Xchanging announced to the London Stock Exchange today that it has agreed a recommended cash offer with US IT services goliath CSC for 190 pence a share, valuing the firm at about £480m.

The deal represents an 81 per cent premium on Xchanging's average share price in the three months ending 2 October and a 19 per cent premium on Capita's 160 pence offer on 14 October, Xchanging chairman Geoff Unwin pointed out.

"The Xchanging board has withdrawn its recommendation for the Capita offer and is now recommending that Xchanging shareholders accept the offer from CSC," he said.

Specialising in business process services, technology – including its Xuber insurance software – and procurement, Xchanging posted an adjusted operating profit of £20.4m on revenues of £199.4m in the first six months of 2015.

CSC CEO Michael Lawrie said: "CSC leads clients on their digital transformation journeys. Xchanging's capabilities and experience in the commercial insurance market would complement CSC's global insurance presence in software, outsourcing and services.

"I look forward to welcoming Xchanging to the CSC family as we continue to grow our insurance business and invest in our differentiated next-generation solutions."