DXC Technology is combining its U.S. public sector business with Vencore Holding Corp. and KeyPoint Government Solutions, creating a publicly traded company to serve U.S. government customers.
Vencore and KeyPoint are owned by affiliates of private equity firm Veritas Capital, which remains an investor in the new business. The expected completion of the new business is 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, DXC chairman, president and CEO. “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 new company, whose name is to be determined, will offer the U.S. federal government solutions in cybersecurity, big data analytics, cloud engineering, enterprise IT services, and systems engineering.
“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, 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.”
Vencore CEO and President Mac Curtis will become CEO of the new company. Marilyn Crouther, senior vice president and general manager at DXC USPS, will serve as the new company’s chief operating officer. Lawrie will chair the board of the new company.
“Abracadabra, we have a new pure play public Govcon firm with the skill sets, management team and scale to be successful,” said Bob Kipps, managing director at KippsDeSanto & Co. “Kudos to Ramzi and Mac!”
“This is a winning scenario for all parties involved. To have the creativity and initiative to construct this multi-billion dollar GovCon heavyweight, essentially overnight, is worthy of note and is the premise on which great stories are built,” said Mark HuYoung, managing partner at NorthWind Partners. “Blending two strong leadership teams smartly with Mac and Marilyn out front and having a deeply experienced board (to include Ramzi and Mike) should help in crafting the right strategic message and vision for the newly formed company’s brand moving forward and avoid missing any critical milestones out of the gates as a public entity. It will be exciting to see this deal completed and watch the company move into the market under a new banner in 2018.”