DXC Technology has completed the sale of its State and Local Health and Human Services business to Veritas Capital for $5 billion to form Gainwell Technologies, DXC reported on Thursday.
“I am very pleased that we have delivered on our plan in completing this transaction, which strengthens our balance sheet and allows us to bring the ‘new DXC’ to the market. Our focus on our people and our customers combined with our improved financial flexibility better positions DXC for long-term success,” said Mike Salvino, president and CEO, DXC.
DXC will use the net proceeds from the cash consideration to strengthen its balance sheet and reduce debt by approximately $3.5 billion. Following the repayment of debt, DXC will have approximately $6.0 billion of total debt on its balance sheet and net-debt of about $3.0 billion.
“Today marks the beginning of an exciting new chapter for Gainwell, and we thank DXC for its partnership and stewardship in establishing the company as a true technology leader,” said Ramzi Musallam, CEO and managing partner of Veritas Capital, as well as a 2020 Wash100 Award recipient.
Gainwell will operate as a standalone company with over 7,500 employees who will support clients across 42 U.S. states and territories. The company will offer Medicaid Management Information Systems (MMIS), fiscal agent services, program integrity, care management, immunization registry and eligibility services.
Gainwell carries will focus its efforts through technological innovation, service excellence and industry expertise, offering clients scalable and flexible solutions for complex challenges.
“With the invigoration and focus of a standalone company, Gainwell is poised as an innovative partner in the evolving healthcare technology market. We are proud to build upon Gainwell’s deep heritage and experience to continue to support clients in achieving essential outcomes in their communities nationwide,” added Musallam.