Covansys expands government biz

• By Dibya Sarkar
• Jun 13, 2002

Covansys Corp., a consulting and technology services company, last week

purchased PDA Software Services Inc., which has built several state-administered

systems for a federally funded health program.

The $16.5 million acquisition of the software services company will

augment Covansys public-sector capabilities and expertise, according to

Harvey Levin, vice president of Covansys' state and local government division.

"On our side, we feel it's going to enhance our shareholder value,"

he said.

Farmington Hills, Mich.-based Covansys, which provides consulting to

25 states and numerous local governments, already offers health care technology

expertise in child support, child care and case management. A major focus

is in offering solutions to help governments comply with the Health Insurance

Portability and Accountability Act of 1996.

Covansys also does Web-based titling and registration in the transportation

area, handles unemployment insurance benefits, and is the largest provider

of public retirement benefits systems in the country.

"We grew to become a bigger part of the company's revenue last year,"

said Levin, referring to Covansys' public-sector practice.

PDA, which was a wholly owned subsidiary of Selective Insurance Group

Inc., has developed, implemented and maintained systems for at least 15

states and Washington, D.C., that are required to track people using the

Special Supplemental Nutrition Program for Women, Infants and Children.

Popularly known as WIC, the program provides food, nutrition counseling

and access to health services to low-income women, infants and children.

PDA's software verifies the authenticity, validity and payment of food

voucher checks after authorized vendors, such as grocery stores and pharmacies,

deposit them.

Levin said it's likely the company will find ways to use PDA's other

technology solutions, including a Web-based flood insurance business and

business process outsourcing, in its other public and private markets.

PDA, which has annual revenues of $18 million, has 180 total employees

at its headquarters in Overland Park, Kan., and offices in Atlanta and Indianapolis.

Covansys, a publicly traded company, has 4,400 employees in 23 locations

worldwide. It reported revenues of $404 million last year.