Apollo Global and Kyndryl Holdings Consider Joint Bid for DXC Technology

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Apollo Global and Kyndryl Holdings, the IT services provider spun out of IBM, are reportedly in discussions regarding a joint bid for DXC Technology, according to sources familiar with the matter. The potential acquisition offer for DXC is estimated to be between $22 and $25 per share. Following this news, DXC shares surged by 11% on Monday, closing at $18.45 in New York and resulting in a market value of $3.3 billion for the company.

DXC, which offers a range of IT services including analytics, engineering, cybersecurity, cloud infrastructure, and outsourcing, is also exploring options to divest its insurance software business for over $2 billion. Alternatively, DXC may choose to remain an independent entity under the leadership of CEO Raul Fernandez, who assumed the role in February.

The sources, speaking on condition of anonymity due to the confidential nature of the matter, revealed that DXC and Apollo declined to comment, while Kyndryl has yet to respond to requests for comment.

Over the past year, DXC has faced revenue challenges attributed to factors such as high interest rates and economic uncertainties, leading many corporate clients to reduce spending. This has resulted in a significant decline in DXC’s share value, prompting the company to implement cost-cutting measures and restructuring initiatives.

Notably, DXC engaged in discussions regarding a potential sale last year, which ultimately ended after a private equity suitor failed to secure the necessary financing.

Kyndryl, specializing in infrastructure IT services, boasts a market value of $6 billion, while Apollo Global, a major player in private equity and corporate credit assets, manages assets worth $671 billion. If successful, the joint bid by Apollo and Kyndryl could significantly impact the future trajectory of DXC Technology.