NEW YORK (TheStreet) -- Computer Sciences (CSC gained 5.2% to close at $59.62 Monday following a report that the IT company contacted several private equity firms to gauge interest in a leveraged buyout.
The company talked to Blackstone Group (BX - Get Report) and Bain Capital, among others about a possible leveraged buyout, according to Bloomberg. The talks are reportedly at early stages, and may not end in a deal.
Computer Sciences CEO Mike Lawrie reportedly told the private-equity firms that the company's turnaround is halfway done.
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The potential buyers view the company as a cheap buyout based on its earnings, taxes, depreciation, and amortization, but are concerned about its cash flow and slower-growth business units, according to Bloomberg.
Shares of Computer Sciences were gaining 0.2% to $59.75 in after-hours trading.
TheStreet Ratings team rates COMPUTER SCIENCES CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate COMPUTER SCIENCES CORP (CSC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
You can view the full analysis from the report here: CSC Ratings Report