Greg Roumeliotis and Milana Wynn
(Reuters) – The buyout of Apollo Global and Kyndril Holdings, an information technology services provider spun off from IBM (NYSE:) are in talks about a joint bid for DXC Technology (NYSE:), people familiar with the matter said Monday.
Apollo and Kyndril have discussed an offer to acquire DXC for between $22 and $25 a share, one of the people said. DXC shares jumped on the news and finished trading in New York on Monday up 11% at $18.45, giving the company a market value of $3.3 billion.
DXC, which is also an IT services provider, is separately accepting bids for the sale of its insurance software business valued at more than $2 billion and may choose to remain an independent company under Raul Fernandez, who was named chief executive in February, the people added.
The sources requested anonymity because the matter is confidential. DXC and Apollo declined to comment. Kindril did not immediately respond to requests for comment.
DXC’s business offerings include analytics and engineering that help companies manage their operations, as well as cybersecurity, cloud infrastructure and outsourcing.
The company’s revenue has fallen sharply over the past year as high interest rates and fears of an economic slowdown prompted many of its corporate clients to cut spending. Its shares have lost more than a third of their value in the past 12 months.
DXC responded to the economic downturn with a series of cost cuts and restructuring initiatives. The Ashburn, Virginia-based company said it last held talks to sell itself last year and ended those talks after the private equity bidder failed to raise the necessary financing.
Kyndril, which specializes in IT infrastructure services, has a market value of $6 billion. With $671 billion in assets under management, Apollo is one of the world’s largest investors in private equity and corporate credit assets.