It has been reported that Apollo Global Management Inc. and Kyndryl Holdings Inc., a spinoff from IBM, are currently in discussions regarding a potential joint bid for DXC Technology Co. The estimated bidding range is between $22 and $25 per share. This development had a substantial impact on the shares of DXC, which surged by 11% and closed at $18.45, resulting in a market value of $3.3 billion for the company.
DXC, a provider of IT services, has also been actively seeking bids for the sale of its insurance software business, which holds a valuation of over $2 billion. Amidst these potential changes, there is also the possibility that the company may opt to remain independent under the leadership of Raul Fernandez, who recently assumed the position of CEO.
It is well-known that DXC has encountered challenges in the past year, with its revenue being affected by high-interest rates and concerns regarding an economic slowdown. These factors have led to a reduction in spending by many of its corporate clients, resulting in a decline of over 30% in the company’s shares over the last 12 months. However, DXC has responded proactively to these challenges by implementing cost-cutting measures and restructuring initiatives.
The potential joint bid by Apollo and Kyndryl comes at a time when Kyndryl Holdings Inc. has been garnering positive attention from Wall Street, with analysts expressing a strong buy sentiment. With a market value of $6 billion, Kyndryl is positioned as a significant player in the IT services sector.
On the other hand, Apollo Global Management Inc. is a key player in private equity and corporate credit assets, with assets under management amounting to $671 billion. The possible collaboration between Apollo and Kyndryl for the acquisition of DXC Technology Co. could have important implications for the IT services industry.
Following the release of this news, DXC Technology traded at $19.25 in after-hours trading, witnessing a 4.34% increase after Monday’s market close.
It is evident that this potential joint acquisition represents a significant development in the IT services industry, and it will be intriguing to observe its progression in the forthcoming days and weeks.
Please note that this content was generated using Benzinga Neuro and edited by Kaustubh Bagalkote. Benzinga does not provide investment advice. All rights reserved.