The Duc Pond

I’m pretty sure every acquaintance of mine knows I’ll be leaving CSC soon for L-3 Communications. I start Monday! It’s been an interesting past several months, with a significant number of departures and now talk of a takeover (discussed below).

Lately there has been all kinds of griping and dissatisfaction (the perception that “SPY sucks” was even addressed at a meeting), but I tried to make it abundantly clear to everyone that this was a decision made in the best interests of my career, not as some kind of petty payback. I’ve been at CSC for 5 years. That’s 20% of my life! I’ve become familiar with the culture and it’s time I moved on to keep my resume fresh. These days you just don’t want to tie yourself down for too long.

Probably the hardest thing to give up will be the people. I don’t know of anywhere else that I can build this pretty big network of people at two companies (CSC and Lockheed) that has stayed pretty cohesive over the years. To be fair I’ve only been here for a couple years, but in that time a lot of people have switched jobs and we still all keep in contact. That’s cool. L-3’s tougher, though, since it’s further away and lunch excursions aren’t as easy. I still want to keep all my contacts and I hope we’ll all keep in touch.

Now about this talk of an acquisition by Lockheed Martin. People at work are talking about it like it’s a done deal. It’s not! Here are some thoughts I emailed to a friend at my future employer:

It’s by no means a done deal. It’s in the discussion phase at the moment, so CSC could always reject the bid. Also, the DoD can veto the merger if they feel it’s counter to their interests. Plus, CSC is soliciting bids from other investors so if the Warburg-Blackstone-Texas Pacific-Lockheed alliance’s bid is surpassed by another, CSC could go with the other. I also find it curious that the aforementioned holding companies would be interested in CSC’s commercial business when it’s the government sector that has the best growth. Perhaps they would see fit to kick Lockheed out of their alliance.

Plus, M&A in general rarely works out well in the corporate world. Well, I shouldn’t say “rarely” but it’s not as easy as people think. On the other hand, if the relationship between CSC and Lockheed in Moorestown is any indication, there’s already a considerable amount of synergy (a word that ALWAYS gets bandied about when you’re talking about M&A) in contracts where Lockheed is CSC’s customer. We work very closely with them, so I’d expect those relationships to stay pretty much the same.

If does go through, it would be interesting. A lot of support staff (like the security people, document control, etc.) would probably get laid off. I wonder if Lockheed would pick and choose who they kept. And I wonder how benefits and everything would be merged in.

CSC stock is a hell of a bargain right now, as it’s trading at less than 12 times earnings (compared to the S&P 500’s average of like 14 or something) and improving earnings by like 19% year over year. I think I might wait a while before rolling over my 401(k).