CSC to bolster offshore presence with Covansys deal

IT outsourcing specialist CSC to shell out $1.3bn in a deal that will almost double the company's Indian workforce

Global IT services giant CSC has today announced it is to acquire rival outsourcing specialist Covansys for $1.3bn in a deal designed to extend its ability to offer services from India.

Covansys is officially based in the US, but with 70 percent of the company's 9,000 staff located in India CSC estimates that the merger will almost double its presence on the subcontinent to around 14,000 staff.

CSC president and chief operating officer Mike Laphen said the deal would both significantly accelerate the company’s plan to offer more services from lower cost offshore locations and bolster its direct sales force in the US and Europe.

"The CSC-Covansys combination reinforces our commitment to continuing to build a strong offshore platform, and offers a broad range of capabilities to our clients that can be serviced directly from India or through our existing businesses," Laphen added.

Raj Vattikuti, President and CEO of Covansys, welcomed the deal, claiming it would help the company "penetrate new industry verticals" outside its core markets of healthcare, financial services, retail, manufacturing, telecommunications and high-tech industries.

CSC said the deal was expected to close in the summer, subject to shareholder and regulatory approval.