HPE spins out IT consulting and services business into CSC

26 May 2016 Consultancy.uk

Hewlett-Packard Enterprise has spun out its Enterprise Services business into CSC, creating an entity with annual revenues of $26 billion and more than 5,000 clients in 70 countries. If all goes according to plan, the deal will close by March next year.

Six months ago Hewlett-Packard split into two companies, Hewlett Packard Enterprise (HPE), containing its services unit and industrial-grade server computers business, and HP, which spans its PC and printing business. While the computing side of HPE has performed well since the split, with revenues up 7% from the same period a year ago, the services unit has been relatively stagnant. In a bid to bolster the productivity and margins of its Enterprise group, HPE has since the split launched a series of restructuring and improvement plans.

On Tuesday, HPE’s Chief Executive Meg Whitman unveiled that the company has spun off its IT consulting and services group (‘Enterprise Services’) to CSC, a move which allows HPE’s remaining business (~$33 billion in annual revenue) to focus on its cloud services footprint and other fast-growing units. For CSC, which too has gone through a recent split*, the merger adds nearly $19 billion to its current circa $8 billion revenue base, creating one of the world’s largest pure-play IT services companies, serving 5,000 clients through, among others, 85 delivery centres and 95 data centres across 70 countries. The new company will focus on supporting clients with digital transformations needs – ever more in demand – through a range of IT related services, including cloud, security, application development and modernisation, big data and analytics, mobility, workplace, and sophisticated business process and IT services.

HPE spins out IT consulting and services business into CSC

Through the deal, both companies expect synergies to deliver $1 billion of immediate savings, with $1.5 billion in subsequent years. As part of its carve-out, HPE expects $900 million in separation charges, of which $300 million will be recorded in 2016. The merger between the two giants is set to be completed by March 2017, although it is still subject to both shareholder and regulatory reviews and approvals. CSC is being supported through the deal by financial advisors RBC Capital Markets and legal advisor Allen & Overy. Goldman Sachs & Company is serving as financial adviser to HPE.

“Our proposed merger with HPE Enterprise Services is a logical next step in CSC’s transformation,” says Mike Lawrie, who currently serves as Chairman, President and CEO of CSC – and will continue in the role at the new company. “As a more powerful and versatile global technology services business, the new company will be well positioned to innovate, compete and serve clients in a rapidly changing marketplace. We are excited by the great potential this merger brings to our people, clients, partners and investors, and by the opportunity to strengthen our relationship and collaboration with HPE.” 

HPE’s President and CEO Whitman will join the new company’s Board of Directors, which will further be split equally between nominees of CSC and HPE. “The ‘spin-merger’ of HPE Enterprise Services with CSC is the right next step for HPE and our customers,” she states. “Enterprise Services’ customers will benefit from a stronger, more versatile services business, better able to innovate and adapt to an ever-changing technology landscape. As two companies with global scale, strong balance sheets and a focus on innovation, both HPE and the new company will be well positioned as leaders in their respective markets.”

* CSC split into CSC, which serves commercial and government clients globally, and CSRA, which serves public sector clients in the US.



SQW Group purchases property-based regeneration consultancy

19 April 2019 Consultancy.uk

UK consulting firm SQW Group has completed its first acquisition since it completed a management buyout in January 2019. BBP Regeneration joins the company having collaborated with SQW for more than 20 years.

Established in 1983, SQW Group now operates all over the world. Comprising SQW, Oxford Innovation, Oxford Innovation Services – one of the UK’s leading innovation centre operators – and Oxford Investment Opportunities Network, the organisation’s origins can be traced to Britain’s two ancient university cities: Oxford, through Oxford Trust founders, Martin and Audrey Wood, and Cambridge, through SQW’s work in producing The Cambridge Phenomenon.

The consultancy specialises in public policy, working with entities from the public, private and voluntary sectors to research, develop, implement and evaluate social and economic development interventions. It now employs over 250 people across regional offices in London, Oxford and Edinburgh, and provides business support to over 4,000 entrepreneurs and small businesses each year. At the start of 2019, SQW secured its independence in a management buyout, advised on by M&A experts from Liberty Corporate Finance and Penningtons Manches.

SQW Group purchases property-based regeneration consultancy

SQW has strengthened its position as a provider of services across the business spectrum with the acquisition of BBP Regeneration. Founded in 1994, the consulting firm specialises in land and property-based regeneration and growth schemes, and is a leading social and economic development consultancy. 

The two firms first worked together over 20 years ago, when SQW and BBP collaborated to develop the first Regional Economic Strategy for the South East. More recently, they developed an economic strategy for Thanet and are now working together in locations stretching from Cwmbran via Oxfordshire to London.

With the addition of BBP, SQW can now provide an integrated advisory service for organisations developing property schemes which deliver economic benefit to their local area. By joining SQW, meanwhile, BBP hopes to further enhance its ability to support clients in delivering property and place-making ambitions. 

Speaking about the deal, SQW CEO David Crichton-Miller commented, “The UK more than ever needs solutions to the challenges of places – of high streets under threat, of meeting housing delivery targets, and of both economically over-successful and economically challenged towns and cities – and the combination of SQW and BBP is uniquely suited to developing those solutions. [This deal] brings together critical and complementary services relating to places to serve our clients with leading edge and practical advice.”

Andy Smith, Director of BBP Regeneration, added, “SQW shares with BBP the same values of seeking to provide outstanding, practical, real world advice that helps get buildings built and places developed.  We greatly look forward to the opportunities that come from joining our two organisations together.”