El Segundo, Calif. - In response to interest, Computer Sciences Corp.'s board of directors has decided to explore strategic alternatives to enhance shareholder value, including a potential sale of the company.The company has retained Goldman, Sachs & Co. as its financial advisor in this process. CSC cautions that there can be no assurance the exploration of strategic alternatives will result in a transaction, and the company does not intend to disclose developments regarding its exploration unless and until the Board of Directors has approved a specific transaction.
CSC also is implementing a restructuring program that is expected to significantly improve future cash flow and earnings. According to CSC Chairman and Chief Executive Officer Van B. Honeycutt, "For some time it has been apparent to us, and to other companies in our industry, that there is excess capacity in certain geographies, particularly Europe. After lengthy consideration, we have decided that this is an appropriate time to deal with the issue through a restructuring. This action is designed to enhance shareholder value regardless of any strategic alternatives we may explore."
The restructuring program, which is designed to streamline CSC's worldwide operation and leverage the increased use of lower cost resources, involves workforce reductions of approximately 4,300 employees during fiscal 2007, which began April 1, 2006, and approximately 700 employees in fiscal 2008. A majority of these reductions will occur in Europe, but plans will vary by country based on local legal requirements and consultation with works councils and employee representatives, as appropriate.
Excluding pre-tax restructuring charges of approximately $345 million in fiscal 2007 and approximately $30 million in fiscal 2008, the company expects the restructuring plan to result in pre-tax savings of approximately $150 million in fiscal 2007 and approximately $300 million in fiscal 2008.
Source: Computer Sciences Corp.
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