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IT services behemoth CSC today announced that it has completed the acquisition of Xchanging.
UK-based Xchanging provides technology-enabled business solutions to organisations in global insurance and financial services, healthcare, manufacturing, real estate and the public sector.
The deal, which was announced last December, was accepted overwhelmingly, with approximately 87% of Xchanging shareholders approving the deal. Capita, which had also been in the running for a takeover, only managed to secure 14% acceptances from shareholders, before being shunned in favour of CSC.
In an update to the City, CSC today said that approval had been granted from the UK, European, and US regulators. While it is still waiting from approval from the German regulator, the update said that the ‘waived the German regulatory approval condition’ making the offer ‘unconditional in all respects’.
"We are delighted to have the Xchanging team join CSC to create a dynamic technology leader," said Mike Lawrie, CSC's chairman, president and CEO. "The addition of Xchanging is another step toward our goal of becoming a leader in the key geographies and markets we serve. Xchanging's people and offerings portfolio are a complement to CSC's existing business, which will allow us to demonstrate our commitment to areas such as the London market and the commercial insurance industry."
For CSC's non-insurance clients, the addition of Xchanging will enable the company to offer access to a broader, partner-enriched portfolio of services, the company said in a statement.
"Our integrated organisation will now offer innovative, next-generation technology solutions and services to every segment of the insurance market globally," said Phil Ratcliff, vice president and general manager of CSC's global insurance industry. "Together, we will innovate, design and deliver the most challenging insurance projects for our clients, transforming their businesses and the market.
"The way insurance is being bought, sold and managed is changing rapidly," Ratcliff continued. "Many insurers now recognize the need to take a 'digital first' approach in order to maintain their relevance with distributors and clients. The coming together of these two organisations provides a complementary set of technology and business process services to help insurers on their road to digital."
Xchanging’s shares are expected to cease trading on the LSE on or around 6 June.
“CSC is clearly after Xuber, Xchanging's ‘newly modernised suite of insurance platforms’, which are well established with the largest insurers, managing agents and brokers,” commented John O'Brien of TechMarketView. “For CSC a takeover of Xchanging makes a lot of sense. Firstly, Xchanging’s Technology business is CSC’s bread and butter, offering both infrastructure and applications services as well as the insurance software Xuber. Within Xchanging these will have been restricted due to the limited scale and international reach, so would benefit from being part of the larger CSC group.”
Jamie Macgregor, senior vice president, global insurance at research and management consulting firm Celent, commented: "The addition of Xchanging strengthens CSC's insurance footprint where, according to Celent's own data, it is the largest provider of core insurance solutions globally. For Xchanging clients, CSC brings with it a whole new set of capabilities and skills relevant to its own segment of the market, in areas such as digital transformation, cloud orchestration and broader technology services."