After a lengthy review, the Federal Trade Commission (FTC) last month cleared Computer Sciences Corp.'s (ElSegundo, CA) acquisition of Columbia, SC-based Mynd Corp.
However, because CSC and Mynd were the two leading software providers for claims assessment systems, the FTC required that Mynd divest its claims assessment system, known as Claims Outcome Advisor (COA), before the deal could be completed.
CSC and Mynd anticipated the conflict between CSC's Colossus claims assessment system and COA, says Pete Boykin, president of CSC's Global Financial Services Group. "The FTC's main stipulation was that CSC, as part of the agreement, would divest Mynd's COA product. It was not totally unexpected that the request came through from the FTC." CSC/Mynd sold COA to ISO (New York).
However, other observers were caught somewhat by surprise by the FTC's stipulation. "It did come as a surprise to us," says an attorney with a Washington, DC-based firm that advises institutional investing clients on mergers and acquisitions. "We had heard there were problems with workers' comp products creating a monopoly. The claims assessment systems hadn't really crossed our radar screens."
Mynd will mostly become part of CSC's Global Financial Services Group. Mynd's IT infrastructure administration will be integrated into CSC Global Infrastructure Services Group. CSC's Boykin says most products will be able to work together, and that there is "great synergy from the products...especially because we will leverage the research and development expenditures."
Between CSC and Mynd, "there was a 60 percent overlap in customers," says Boykin. The overlap may have factored into CSC's late-January announcement that it would lay off approximately 200 Mynd employees.
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio