CSC to acquire DynCorp

Computer Sciences Corp. this morning announced a $950 million deal to acquire DynCorp, aimed largely at bolster CSC's position in the federal government information technology space.

CSC chairman and chief executive Van Honeycutt said the acquisition will vault CSC into the top 10 government contractors, with anticipated annual revenues of $6 billion. Under the terms of the agreement, which must be approved by DynCorp shareholders, CSC will pay $15 in cash and $43 in CSC stock for each DynCorp share.

DynCorp, which had revenues of $2.3 billion in fiscal 2002, has 23,000 employees at more than 500 locations worldwide. The company, which will become part of CSC's Federal Sector unit, located in Reston, Va., focuses on defense, civilian and security markets.

Paul Lombardi, president and chief executive of DynCorp said the rationale behind the purchase is that CSC feels strongly about adopting DynCorp's mission orientation.

"CSC does, for example infrastructure work, but they don't have the capability to train troops and offer logistical support in real time. That is our strong suit," Lombardi said. "If they have that mission-centric orientation, they'll be better suited to work with more of the federal agencies."

Lombardi said DynCorp. has worked with the Defense Department since the Korean War, but didn't really have IT capabilities until about four or five years ago.

"We and CSC came at the federal government from opposite directions," he said. "They are, no doubt, a quality firm with great talent and highly visible contracts."

He said the combined company would be the largest contractor with the Environmental Protection Agency, and brings to the CSC table contracts and relationships with the departments of State, Energy and Justice.

The combined business will have an estimated 38,000 employees, nearly 23,000 of which will come from Falls Church, Va.-based DynCorp.

Honeycutt said the DynCorp's business, 98 percent of which is for the federal government, complements CSC's federal business lines and he expects total returns from the combined business of $40 billion by the end of 2005.

"DynCorp allows a greater breadth of end-to-end solutions and a significant increase in our exposure to the growth area of federal government IT and functional outsourcing," he said. "We will have 38,000 people serving the federal government and $6 billion in revenue as we enter 2004. We will have people serving virtually every federal agency."

El Segundo, Calif.-based CSC expects to conclude the transaction during the first quarter of 2003.


  • IT Modernization
    shutterstock image By enzozo; photo ID: 319763930

    OMB provides key guidance for TMF proposals amid surge in submissions

    Deputy Federal CIO Maria Roat details what makes for a winning Technology Modernization Fund proposal as agencies continue to submit major IT projects for potential funding.

  • gears and money (zaozaa19/

    Worries from a Democrat about the Biden administration and federal procurement

    Steve Kelman is concerned that the push for more spending with small disadvantaged businesses will detract from the goal of getting the best deal for agencies and taxpayers.

Stay Connected