Computer Sciences Corp., which provides information technology services to a wide range of industries, said Monday that it reached a deal to sell its credit services unit to Equifax Inc. for $1 billion in cash.
Falls Church, Va.-based CSC said the sale is part of its efforts to rebalance its lineup of products and services and focus on its technology related offerings. Atlanta-based Equifax collects and sells consumer credit information.
CSC said it expects the after-tax proceeds of the sale to total between $750 million and $800 million. It plans to use $300 million to $400 million of that to buy back shares, contribute another $300 million to $400 million to its pension plans and use the rest for general corporate purposes.
CSC's credit services unit owns credit files in 15 Midwestern and Central U.S. states. It's one of the largest independent U.S. consumer credit reporting agencies and has been an Equifax affiliate for more than 20 years.
The deal is expected to close by the end of the calendar year. For the current fiscal year, the credit services business is expected to contribute about 40 cents in earnings per share and $230 million in revenue, CSC said.
CSC shares rose $1.70, or 4.5 percent, to $39.76 in morning trading, while Equifax shares gained $2.24, or 4.4 percent, to $53.48.