Covansys Corporation (Nasdaq: CVNS), a global consulting and technology services company, announced today it has acquired PDA Software Services, Inc. (PDA), a wholly owned subsidiary of Selective Insurance Group Inc. (Nasdaq: SIGI).
The acquisition expands Covansys’ portfolio of impressive IT capabilities for state governments and strengthens the company’s business process outsourcing capabilities, particularly in the insurance industry, where Covansys has a strong track record of application maintenance and development outsourcing experience.
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PDA, headquartered in Overland Park, Kansas, is the market leader in the development, implementation and maintenance of systems for states required to meet federal tracking and reporting mandates of the Women, Infants & Children (WIC) Program. They are the only vendor to offer a unique Web-based product, called FloodConnect that helps private insurers manage flood insurance business through the National Flood Insurance Program.
“PDA’s capabilities provide Covansys with market leadership in an important public sector technology segment and improved business process outsourcing capabilities,” said Ned C. Lautenbach, co-chairman and chief executive officer of Covansys. “PDA’s capabilities will complement Covansys’ strong set of solutions in the public sector industry. Clients of both companies will benefit from the depth of our combined expertise and experience. We welcome PDA’s employees to the Covansys team.”
PDA Software was founded in 1975 and currently employs approximately 180 full-time professionals providing products, software consulting, application development and processing services to clients nationwide. Their services and operations span a broad range of technical environments including Web application development and EDI/XML data exchange. Supported industries include federal and state agencies, insurance, agrochemical and pharmaceutical.
Selective Insurance Group Inc. purchased PDA in December 1998 and the company continued to function as a separate operation within Selective.
“This acquisition allows our employees to do what they do best – focus on high-quality, custom software development and industry-specific solutions for state and local governments as well as the insurance and pharmaceutical industries,” said Tom McCarthy, president of PDA. “Our skills and experience are the perfect fit for Covansys. Our employees will welcome the global support and significant opportunity for growth, along with Covansys’ commitment to customer satisfaction.”
The public sector resources of PDA will become part of Covansys’ Public Sector Practice, which provides consulting to more than 25 states and numerous local governments and specializes in custom and packaged solutions for public retirement, health and human services, transportation, labor and justice services.
PDA’s annual revenues are approximately $18.0 million and the net purchase price is approximately $16.5 million. PDA’s income and expenses will be fully consolidated into Covansys’ financial statements beginning June 1, 2002. The transaction is expected to be neutral to slightly accretive to Covansys’ earnings.
