DXC Technologies finalizes $5B spinoff of health, human services business
Gainwell Technologies will operate as standalone company with 7,500+ employees
Tysons-based Fortune 500 IT services company DXC Technology has completed the sale of its U.S. State and Local Health and Human Services business to private equity firm Veritas Capital for $5 billion, the Fortune 500 company announced Monday.
DXC Technology announced in March it would sell the business unit, which provides technology enabled, mission critical solutions for U.S. administration and operations of health programs. The completion of the transaction forms a new company called Gainwell Technologies, which will operate as a standalone company with more than 7,500 employees. It will focus on Medicaid management information systems, fiscal agent services, program integrity, care management, immunization registry and eligibility services.
“On behalf of everyone at DXC, I would like to thank our people who are joining Gainwell for their service and commitment to DXC. I would also like to thank our customers who are in great hands going forward,” DXC President and CEO Mike Salvino said in a statement. “I am very pleased that we have delivered on our plan in completing this transaction, which strengthens our balance sheet and allows us to bring the ‘new DXC’ to the market. Our focus on our people and our customers combined with our improved financial flexibility better positions DXC for long-term success.”
DXC will use the net proceeds to reduce debt by approximately $3.5 billion, and following the debt repayment, DXC will have approximately $6 billion of total debt and $3 billion of net debt.
“Today marks the beginning of an exciting new chapter for Gainwell, and we thank DXC for its partnership and stewardship in establishing the company as a true technology leader,” Veritas Capital CEO and Managing Partner Ramzi Musallam said in a statement. “With the invigoration and focus of a standalone company, Gainwell is poised as an innovative partner in the evolving healthcare technology market. We are proud to build upon Gainwell’s deep heritage and experience to continue to support clients in achieving essential outcomes in their communities nationwide.”
DXC Technology was formed in April 2017 as a result of the merger of Computer Science Corp. and the Enterprise Services business of Hewlett Packard Enterprise. The company has 138,000 employees worldwide and last year had revenues of more than $21 billion.