DXC Technology Adds Digital Talent, Capabilities via Acquisition

Virginia-based MSSP DXC Technology is shelling out about $2 billion to buy Luxoft, a global technology services and consulting partner that provides specialty technology solutions to customers in 22 countries across five continents.

DXC said the acquisition will expand its digital-services portfolio, broaden its presence in high-growth verticals, enhance access to engineering talent globally and strengthen its digital value proposition overall. The transaction is expected to accelerate growth for DXC, with a focus on cross-selling digital services, expanding into new markets and scaling digital talent.

Look for the deal to close in June.

DXC said partners will be able to work with an independent digital business that combines the “best front-end digital capabilities with unmatched skills in IT modernization and integration.” It wouldn’t provide any further comment regarding impact or benefit to partners.

DXC’s Mike Lawrie

“The combination will be a $5 billion-plus digital business … and we have been targeting 20 percent-plus growth in that and I think we feel pretty confident about that … once we close the transaction,” Mike Lawrie, DXC’s chairman, president and CEO, said during a conference call. “We felt we had to do something to accelerate our digital performance, No. 1. And No. 2, Luxoft is positioned in an entirely different part of the market. This is really much more about an end-to-end proposition.”

DXC’s security services predict attacks, proactively respond to threats, ensure compliance and protect data, applications, infrastructure and endpoints.

“There’s very little overlap between what Luxoft does and what DXC does,” Lawrie said. “And the power of this is combining that end-to-end value proposition. And this is all about talent, and this acquisition give us now a base of talent in addition to what we’re doing around our digital business to more rapidly transform the DXC workforce and position us to acquire the skills we need more rapidly that we heretofore have been able to.”

Luxoft offers digital capabilities in areas such as analytics, user experience/user interface, IoT and blockchain, and is a significant player in outsourced engineering services, cloud and DevOps. It also brings vertical expertise in key industries, including automotive (digital cockpit, autonomous drive, connected mobility), financial services (digital consulting, regulatory and compliance, platform implementation) and health care/life sciences (digital lab, customer engagement).

Luxoft also brings a portfolio of other industry offerings for travel, media and communications, and energy and utilities. It provides digital-strategy consulting and engineering services for companies across North America, Europe and the Asia Pacific region.

Luxoft will maintain its brand and operate as a DXC technology company, and will continue to be led by Dmitry Loschinin, the company’s current president and CEO, who will report to Lawrie.

“Our success in recent years has been led by our talent and ability to design, develop and deliver truly innovative digital solutions tailored to client business needs,” Loschinin said. “Aligning with DXC presents an exciting opportunity to unlock new value for our people, clients and partners. We will gain the scale, resources and market presence to better serve and compete, and to more rapidly realize our vision. As part of DXC, we will preserve Luxoft’s differentiated capabilities and culture while driving growth for the combined company.”