Apollo, Kyndryl in bid for DXC Technology, sources say

Kyndryl Holdings

10/06/2024 21:37

(Adds DXC response, share reaction in paragraph 2, background
on the companies in paragraphs 5-8)
    By Greg Roumeliotis and Milana Vinn
       June 10 (Reuters) - Buyout firm Apollo Global  APO.N 
and Kyndryl Holdings  KD.N , the information technology services
provider that was spun out of IBM  IBM.N , are in talks about a
joint bid for DXC Technology  DXC.N , people familiar with the
matter said on Monday.
    Apollo and Kyndryl have discussed an acquisition offer for
DXC of between $22 and $25 per share, one of the sources said.
DXC shares jumped on the news and ended trading in New York on
Monday up 11% at $18.45, giving the company a market value of
$3.3 billion.
    DXC, which is also an IT services vendor, is separately
soliciting bids to sell its insurance software business for more
than $2 billion and may opt to remain an independent company
under Raul Fernandez, who was appointed chief executive in
February, the sources added. 
    The sources requested anonymity because the matter is
confidential. DXC and Apollo declined to comment. Kyndryl did
not immediately respond to a request for comment.
        DXC's business offerings include analytics and
engineering that help companies manage their operations, as well
as cyber security, cloud infrastructure and outsourcing.
    The company's revenue has taken a hit over the last year, as
high interest rates and fears about an economic slowdown have
prompted many of its corporate customers to curb spending. Its
shares lost more than a third of their value in the last 12
months.
    DXC has responded to the slowdown through a series of cost
cuts and restructuring initiatives. The Ashburn, Virginia-based
company has said it last held talks to sell itself last year,
and that it ended these discussions after a private equity
suitor failed to raise the necessary financing.
    Kyndryl, which specializes in infrastructure IT services,
has a market value of $6 billion. Apollo, with $671 billion of
assets under management, is one of the world's biggest investors
in private equity and corporate credit assets. 

 (Reporting by Greg Roumeliotis and Milana Vinn in New York;
Editing by Jonathan Oatis and Lisa Shumaker)
 ((Greg.Roumeliotis@thomsonreuters.com; +1 646 223 6022; Reuters
Messaging: greg.roumeliotis.thomsonreuters.com@reuters.net))