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CSC (CSC) To Sell Credit Services Unit To Equifax (EFX) For $1B

 December 03, 2012 08:20 AM

(By Balachander) Computer Sciences Corp. (NYSE: CSC) has agreed to sell its credit services business for $1 billion in cash to Equifax Inc. (NYSE: EFX) as part of its strategy to rebalance its portfolio of services.

CSC, which offers technology-enabled business services, expects after-tax proceeds from the sale of the unit to be roughly $750 to $800 million.

The company's credit services unit is the largest independent U.S. consumer credit reporting agency and has been an Equifax largest credit affiliate since 1988. CSC owns consumer credit files in 15 U.S. states covering around 20 percent of the U.S. population.

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"This transaction advances CSC's turnaround by reshaping our portfolio and enabling the company to focus on next-generation technology solutions and service," commented CSC CEO Mike Lawrie.

Equifax, a provider of information services, expects to realize tax benefits from a step-up in the tax basis of the acquired assets having an estimated net present value of around $200 million over a 15-year amortization period.

Equifax CEO Richard Smith said he expects the deal to be "solidly" accretive to Equifax's adjusted earnings per share in 2013. He also expects incremental net operating revenue to Equifax in the range of $115 million to $125 million and EBITDA of $105 million to $110 million as a result of the acquisition.

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The deal is expected to be completed by the end of the calendar year.

CSC shares closed at $38.06 on Friday, and EFX shares ended at $51.24.

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