DXC Technology is facing challenges in terms of sales growth due to macroeconomic headwinds impacting IT spending. Over the past two fiscal years, DXC’s revenue has declined, and the company expects a 4-6% organic revenue decrease for Fiscal 2025. Despite these issues, DXC Technology may choose to remain independent and continue its cost-cutting efforts while aiming for growth in the future. However, Wall Street analysts are cautious about the stock, with a Hold consensus rating and a price target of $18.28, implying a 0.92% downside potential from current levels.
Apollo Global Management and Kyndryl Holdings are reportedly in advanced talks to jointly bid for DXC Technology. The potential bid could value DXC between $22 and $25 per share, a significant premium over its closing price of $16.55. If successful, this acquisition would add billions of dollars to Apollo and Kyndryl’s portfolios and allow them to expand their reach in the IT industry.
On June 10, news broke that Apollo and Kyndryl were considering a joint bid for DXC Technology, causing the stock to surge by 11.48%. After-hours trading saw an additional increase of 4.34%. With a current market cap of $3.3 billion, DXC Technology has significant value that could attract potential buyers like Apollo and Kyndryl.
While there are many factors at play when it comes to M&A activity in the tech industry, it is clear that Apollo and Kyndryl see great value in acquiring DXC Technology if they can strike a deal at the right price point. If successful, this acquisition could provide significant benefits for both companies while also presenting new challenges for DXC as it navigates its future direction amidst ongoing sales growth concerns.