We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
DXC Sets Pricing of Tender Offers for Senior Notes Redemption
Read MoreHide Full Article
DXC Technology Company (DXC - Free Report) has set pricing of the proposed tender offers to redeem senior notes worth $445 million. Notably, on Mar 16, the IT services provider commenced tender offers to purchase the entire outstanding amount under two different senior notes.
The notes include 4.450% senior notes due 2022 issued by DXC (DXC Notes) worth $274.5 million aggregate principal amount and 4.450% senior notes due 2022 worth $170.8 million issued by the company’s wholly-owned subsidiary Computer Sciences Corporation (CSC Notes).
DXC announced yesterday that consideration for each $1,000 principal amount of the notes would be $1,057.27. The tender offer expired yesterday at 5:00 p.m. EDT.
DXC will fund the redemption of the aforementioned senior notes through its available cash in hand. As of Dec 31, 2020, the IT services company had cash and cash equivalents of $3.92 billion.
The company’s latest tender offer to redeem senior notes reflects its commitment toward reducing overall outstanding debt.
Notably, DXC was formed in 2017 by the merger of Computer Sciences Corp. and the enterprise services unit of Hewlett Packard Enterprise (HPE - Free Report) . CSC, prior to the completion of the merger, took additional debt. This has amplified DXC’s total long-term liability, thereby, increasing its interest-cost burden. At the end of fiscal 2020, the company had total outstanding debt (net of current maturities) of $8.67 billion.
To lower its debt burden, the company has resorted to spin-offs and the divestment of non-core assets. Toward this, DXC spun off its U.S. State and Local Health and Human Services business last year and sold it to the private equity firm Veritas Capital for $5 billion.
In June 2020, DXC announced entering into an agreement to sell its healthcare software provider business unit to privately-held Dedalus Group for a total cash consideration of $525 million. The transaction is anticipated to conclude this March.
The strategy has helped it significantly reduce its outstanding debt level to $5.44 billion as of Dec 31, 2020, from $8.67 billion as of Mar 31, 2020.
Additionally, spinning off non-core assets improves DXC’s focus on its core businesses. Also, it enhances the firm’s ability to execute acquisition strategies across high-growth businesses, including enterprise software-as-a-service, technology security solutions, and autonomous driving.
Long-term earnings growth rates for Apple and Facebook are currently pegged at 11% and 19.2%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
DXC Sets Pricing of Tender Offers for Senior Notes Redemption
DXC Technology Company (DXC - Free Report) has set pricing of the proposed tender offers to redeem senior notes worth $445 million. Notably, on Mar 16, the IT services provider commenced tender offers to purchase the entire outstanding amount under two different senior notes.
The notes include 4.450% senior notes due 2022 issued by DXC (DXC Notes) worth $274.5 million aggregate principal amount and 4.450% senior notes due 2022 worth $170.8 million issued by the company’s wholly-owned subsidiary Computer Sciences Corporation (CSC Notes).
DXC announced yesterday that consideration for each $1,000 principal amount of the notes would be $1,057.27. The tender offer expired yesterday at 5:00 p.m. EDT.
DXC Technology Company. Price
DXC Technology Company. price | DXC Technology Company. Quote
DXC will fund the redemption of the aforementioned senior notes through its available cash in hand. As of Dec 31, 2020, the IT services company had cash and cash equivalents of $3.92 billion.
The company’s latest tender offer to redeem senior notes reflects its commitment toward reducing overall outstanding debt.
Notably, DXC was formed in 2017 by the merger of Computer Sciences Corp. and the enterprise services unit of Hewlett Packard Enterprise (HPE - Free Report) . CSC, prior to the completion of the merger, took additional debt. This has amplified DXC’s total long-term liability, thereby, increasing its interest-cost burden. At the end of fiscal 2020, the company had total outstanding debt (net of current maturities) of $8.67 billion.
To lower its debt burden, the company has resorted to spin-offs and the divestment of non-core assets. Toward this, DXC spun off its U.S. State and Local Health and Human Services business last year and sold it to the private equity firm Veritas Capital for $5 billion.
In June 2020, DXC announced entering into an agreement to sell its healthcare software provider business unit to privately-held Dedalus Group for a total cash consideration of $525 million. The transaction is anticipated to conclude this March.
The strategy has helped it significantly reduce its outstanding debt level to $5.44 billion as of Dec 31, 2020, from $8.67 billion as of Mar 31, 2020.
Additionally, spinning off non-core assets improves DXC’s focus on its core businesses. Also, it enhances the firm’s ability to execute acquisition strategies across high-growth businesses, including enterprise software-as-a-service, technology security solutions, and autonomous driving.
DXC currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Apple (AAPL - Free Report) and Facebook , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for Apple and Facebook are currently pegged at 11% and 19.2%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>