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Accel-KKR and Saber Announce Acquisition of Covansys Corporation's State and Local Government Practice for up to $40 Million; Transaction Creates National Leader in Public Sector Software and Services.

MENLO PARK, Calif. & SALEM, Ore. -- Accel-KKR, a technology-focused private equity investment firm, and Saber Consulting, Inc., a privately-held, leading provider of software and services to the public sector, today announced the acquisition of the State and Local Government Practice of Covansys Corporation (NASDAQ: CVNS) in an all-cash transaction valued at up to $40 million. Covansys Corporation's State and Local Government Practice is a leading nationwide provider of software and services to state and local governments, and has central operations in Columbus, Ohio. The business employs 350 permanent employees, and generated revenues of approximately $75 million in its 2005 fiscal year.

Upon completion of the transaction, the Covansys State and Local Government Practice will be merged into Saber, which is majority-owned by Accel-KKR, and the combined company will operate under the Saber brand. The transaction will create a national leader in providing software and services to state and local goverments - currently a highly fragmented market - with pro forma revenues of approximately $100 million, customers across 46 states, over 500 employees, and product and service offerings in the following practice areas: Elections Management/Voter Registration, Health and Human Services, Pension Administration, Unemployment Benefits Administration, Motor Vehicles, Public Health, Business Intelligence, and Digital Document Management.

Nitin Khanna, President and Chief Executive Officer of Saber, said, "The people, product technology, and customer relationships that Covansys has developed over the years in its State and Local Government Practice are second to none. This transaction positions Saber as the leading provider of software and technology solutions to state and local governments across the country, with a significantly enlarged national footprint; the number one market leadership position in the areas of Election Management, Pension Administration, and Health and Human Services; and bright prospects for strong growth in the coming years. Going forward, we will continue to focus on providing the highest standards of customer service and innovation, and continuing to work closely with our partners at Accel-KKR to intensify the strong momentum for growth that we have at our side."

Arvind Malhotra, Senior Vice President of Covansys' State and Local Government Practice, said, "The entire state and local practice management team and I are excited about this transaction and its many benefits for our customers and employees. As a private company, we will be able to focus on long-term growth and enhancing service for our customers. Accel-KKR has tremendous resources and expertise, and we look forward to joining forces with Accel-KKR and Saber as we move forward."

Rob Palumbo, Managing Director of Accel-KKR, said, "We continue to be impressed with Nitin and Karan Khanna and their outstanding management team, as well as Saber's tremendous growth opportunities in the fragmented public sector software and services space. We saw our initial investment in Saber as the first step in a long-term commitment to help the company realize its growth potential as an industry and market leader, and we view the acquisition of Covansys' State and Local Government Practice as a very important stepping stone towards this goal."

Ben Bisconti, Managing Director of Accel-KKR, said, "This transaction is an excellent example of how a focused private equity firm can work with a successful public company to achieve corporate strategic objectives while continuing to serve the best interests of customers and employees, and without interruptions to the technology innovation process. We believe this is an exciting event in the public sector software and services space, and we expect to make further investments in this space, while continuing to pursue additional opportunities to build Saber's business in the future."

The transaction is expected to close in the second quarter of 2006. Kirkland & Ellis LLP served as legal advisor to Accel-KKR and Saber in this transaction.

About Accel-KKR

Accel-KKR is a technology-focused private equity firm that invests primarily in technology businesses with $15 million to $150 million in revenue that are well positioned for top-line and bottom-line growth. At the core of Accel-KKR's investment strategy is a commitment to developing strong partnerships with the management teams of its portfolio companies and a focus on building value through the contribution of unique financial, strategic, technical, and operational resources. Accel-KKR has a particular focus on the following transactions: Recapitalizations of family-owned or closely-held private companies, divisional buyouts of larger companies, and going-private transactions. For more information, please visit

About Saber Consulting

Saber, founded in 1997, is headquartered in Salem, OR, with offices in Sacramento, CA, Annapolis, MD, and Mequon, WI. The privately held company has deep customer relationships with state and local government entities across the country, providing software and services that underpin essential functions such as voter registration, election management and forms and document processing. The company also implements customized solutions incorporating standard software products to enable data collection and analytics for utility, healthcare, and educational enterprises. For more information, please visit

About Covansys Corporation

Headquartered in Michigan, Covansys Corporation (Nasdaq: CVNS) is a global consulting and technology services company specializing in industry-specific solutions, strategic outsourcing and integration services. Clients gain competitive advantage by leveraging our unique on-site, offsite, offshore delivery capability to achieve rapid deployment, world-class quality and reduced costs. A leader in the public sector market, Covansys is also known for application maintenance and development outsourcing in the healthcare, financial services, retail and distribution, manufacturing, telecommunications and high-tech industries. Founded in 1985, with 7,000 consultants and employees worldwide, Covansys was one of the first U.S.-based IT services companies to establish offshore facilities in India, and is a pioneer in seamlessly integrating offshore capabilities into its offerings. Two of the company's three wholly owned development centers in India are assessed at Level 5 in SEI CMM(R). All three are ISO 9001:2000 certified and assessed at Level 5 in PCMM(R), and five global facilities are BS7799-2:2002 certified. Visit our web site:
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Publication:Business Wire
Geographic Code:1USA
Date:Mar 8, 2006
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