Global software giant CSC this week snapped up one of its major rivals, Mynd, in a £374m takeover deal. The CSC offer was around £10.53 for each of the 35,500,000 outstanding Mynd shares.
Globally, CSC is a leading provider of outsourcing systems and software applications to the insurance and financial services industries.
Mynd, formerly known as PMSC, has a stronghold in the US as an applications supplier to insurers, banks and financial services companies.
CSC's chairman, president and chief executive Van Honeycutt claimed that the combined operation would bring efficiency through scale.
He said: “The acquisition of Mynd reflects a long-term commitment to the global financial services industry and our goal of creating value for the clients, employees and shareholders of both companies.”
While CSC expects to make redundancies following the merger, no announcement has been made yet.
Honeycutt said: “Mynd's portfolio of insurance related products and service offerings, and its prestigious client base, will benefit from CSC's capabilities in consulting, systems integration and IT outsourcing.”
The new company may have some obstacles to overcome. With both organisations enjoying strong positions in insurance-related markets, there has been speculation that the deal may run into competition issues.
Jim Woods, a consulting account executive at Mynd, admitted that competition in the insurance applications market could become an issue.
He said: “In terms of outsourcing, this deal will not raise any competition concerns. But in the insurance applications market, it will create an oligopoly.
“This will be far and away the largest player, with more applications software installations than anyone.”
But Andy Toms of CSC's financial services group claimed there would not be a problem.
“We have looked quite closely at the competition aspect of this deal and we are convinced there is no issue. In Europe and the rest of the world, IBM is still a massive supplier to the insurance industry,” he said.
In the UK, there has been no announcement yet about whether Mynd will continue to work from its offices in Chertsey, Surrey, or whether it will move to camps that CSC is creating in Aldershot.
