Conduent mulls sale amid private equity interest: report
NEW JERSEY, UNITED STATES — Conduent Incorporated, an outsourcing service provider, is currently exploring a potential sale after receiving acquisition interest, Reuters reported.
The company, a spinoff from Xerox in 2017, is actively engaging with potential acquirers, including several private equity firms, with the assistance of a financial adviser.
These discussions, still at a confidential stage, could lead to a sale agreement in the upcoming weeks, according to sources familiar with the matter.
Market reaction and company profile
News of the potential sale has made Conduent’s shares soar over 24% on Friday, briefly reaching a 52-week high. This surge in stock price has elevated the company’s market valuation to over $700 million. Conduent has not publicly responded to inquiries about these developments.
Conduent offers a range of business services to sectors like commercial enterprises, government, and transportation, incorporating advanced technologies such as cloud computing, automation, AI, and machine learning. These services are essential for functions that include human resources, cost reduction, and payment processing.
Conduent ranked #32 in the OA500 2024, an objective index of the world’s top 500 outsourcing companies.
Acquisition potential
If the acquisition talks conclude successfully, Conduent could see a new phase of growth under the ownership of a firm that can leverage its extensive technological infrastructure and client base. This potential sale follows a history of reconsiderations, including a previous consideration for sale or divestiture in 2019 after pressures from activist investor Carl Icahn.
Financial struggles and global presence
Despite its technological prowess, Conduent has faced challenges in maintaining competitive edge in the outsourcing industry. Since becoming independent, the company has seen its market value decrease significantly from its initial trading start in January 2017.
As of the close of the last fiscal year, Conduent reported revenues of $3.72 billion, a 3.3% or 3.6% decrease from the previous year, with about 90% of this revenue being recurring. The company also reported a substantial loss of $306 million.
Conduent operates globally, employing approximately 55,000 staff across 24 countries. It serves a diverse client base that includes both commercial businesses and government entities, with notable contracts with U.S. federal and state agencies.
The company is set to announce its fourth-quarter earnings on February 12, which will provide further insights into its financial health and may impact ongoing acquisition discussions.
