Under the terms of the agreement, Saber chief executive Nitin Khannan and chief operating officer will retain a 7 per cent stake in the firm while running it as an EDS unit.
Founded in 1997, Saber is one of the fastest-growing providers of software to state and local governments.
“This transaction creates a growth opportunity for EDS as Saber brings complementary capabilities to EDS’ already strong presence in the U.S. state and local government market, and is consistent with our strategy to move aggressively into higher-value application services,” said EDS executive vice-president Corporate Strategy and Business Development Joe Eazor.
“The combination of Saber’s industry-leading applications portfolio, geographic breadth and deep understanding of government technology needs, together with EDS’ global resources and demonstrated strengths in systems integration, will provide unmatched, end-to-end solutions for clients,” Mr Eazor said.
The US state and local government market for IT services is a highly attractive growth segment valued at approximately US$50 billion by research firm INPUT and is estimated to have a compound annual growth rate of nearly 8 percent, driven by modernization of legacy systems and strong demand in new market segments for software and service solutions.
Last year, approximately US$3.3 billion, or 16 percent, of EDS’ revenue came from U.S. Government clients.
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