Fergie's Tech Blog

Lockheed Leads $12B CSC Bid

Via Red Herring.

Shares of Computer Sciences Corporation touched a five-year high Tuesday on reports that Lockheed Martin and three private equity firms plan to offer $12 billion for the information technology provider.

Lockheed is building up its IT services business, and the acquisition of CSC would help the defense contractor to cement its relationship as the top information services provider to the Pentagon, said Philip Finnegan, director of corporate analysis for the Teal Group.

“Lockheed is seen as the preeminent military aircraft provider, but the growth in that sector isn’t going to be there,” said Mr. Finnegan. “If it builds its federal IT business, that helps Lockheed diversify, in terms of the balance between defense and IT, and moves them more into the sweet area of defense, which is in IT services and network-centric warfare.”

Lockheed spokesperson Tom Jurkowsky and CSC spokesperson Mike Dickerson declined to comment, but a Wall Street Journal story about the bid drove shares up $6.75 to close at $58, matching a 52-week high. Earlier, the stock sold for as much as $59.90, its highest level since 2001.

posted by Fergie @ 11/01/2005 03:55:00 PM