CSC looks to solidify place in tech services by purchasing Australia's UXC
Tech giant Computer Sciences Corporation (CSC) is making an effort to purchase Australia’s largest tech services group UXC, in a deal that could potentially be worth $428 million.
As was reported by our sister site Business Review Australia, this is CSC’s third acquisition announced since August by its $8.1 billion commercial business, which will separate from its $4.1 billion U.S. public sector business next month.
Previously in 2011, CSC bought Aussie healthcare technology company iSOFT, although the deal ended unceremoniously behind CSC being forced to take legal action due to iSOFT’s failure to pay contractual entitlements.
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The two sides have agreed to a five-week due diligence period, during which UXC won’t negotiate with or seek any other suitors. Although UXC’s board will consider other offers that come in, CSC will have the right to match any other offer, making it difficult for another company to out-bid CSC.
If the deal is completed, CSC’s 2100 employee operation and UXC’s 3000-person corporation would combine for total revenue of over $1.4 billion in 2015.
CSC, based in Falls Church, Va., specializes in a wide array of services including enterprise software, managed services, consulting, security, infrastructure-as-a-service and more.
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Shareholders of UXC recommend the company accepts CSC’s offer, and will also have an independent analyst give their opinion of whether or not it’s the best move for the shareholders. If the deal goes through, UXC investors will receive payments of $1.28 per share and the acquisition would be complete by February 2016.
UXC managing director Cris Nicolli indentified three aspects in which the two companies would complement each other, including Microsoft Dynamics. UXC is in the top one per cent of Microsoft Dynamics resellers across the globe, while it also has strong relationships with Oracle, SAP and ServiceNow.
In addition, Nicolli believes the health sector and both companies security businesses are also key strengths.
“The proposal from CSC recognises the potential of UXC and is a testament to the strong business we have built,” said Nicolli. “The board of UXC is supportive of this move.
“All of us at UXC are tremendously proud of what we've achieved to date, and the proposal from CSC represents a potential next stage in the evolution of our company.”
UXC, a group of enterprise services companies that has grown by acquisition, recently announced the signing of several new contracts as companies have begun spending more money on technology. The Aussie tech company has annual revenue of $686 million, and a partnership between UXC and CSC would make it one of the region’s top IT services companies based on revenue.
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Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.