Sources: Exclusive Apollo and Kyndryl in potential bid for DXC Technology

Private equity firm Apollo Global and IT services provider Kyndryl Holdings, a spinoff of IBM, are reportedly discussing a joint bid for DXC Technology. The potential acquisition offer for DXC is expected to be between $22 and $25 per share, according to sources familiar with the matter. DXC’s shares surged by 11% in New York trading on Monday, closing at $18.45 and giving the company a market value of $3.3 billion.

Aside from the talks with Apollo and Kyndryl, DXC is also exploring the sale of its insurance software business for over $2 billion. The company may choose to remain independent under new CEO Raul Fernandez, appointed in February. DXC offers a range of IT services, including analytics, engineering, cybersecurity, cloud infrastructure, and outsourcing.

Over the past year, DXC’s revenue has declined due to factors like high interest rates and economic concerns leading to reduced corporate spending. Despite a decrease of more than a third in share value in the last year, DXC has implemented cost-cutting and restructuring efforts to address the downturn. The company had previously engaged in discussions for a sale last year, which were discontinued after a private equity suitor failed to secure adequate financing.

Kyndryl, specializing in infrastructure IT services, has a market value of $6 billion, while Apollo has assets under management totaling $671 billion and is a major player in private equity and corporate credit investments. Both companies declined to comment on the potential bid for DXC.