Atos strengthens in the United States with the acquisition of Syntel

New acquisition for Atos. The French group led by Thierry Breton offers the American Syntel, a player in application services, listed on Nasdaq. "We identified this company five years ago explains Thierry Breton, the 'Echoes'. The first exchanges with Bharat Desai, Syntel's boss started in October 2014. "

The operation will allow the IT services specialist to reinforce a new" brick "brought to its customers, that of digital transformation. "We will accelerate the digital transformation of large customers in all sectors: marketing, health, retail, banking, insurance in which Syntel has specific offers many of which are patented" details the boss of Atos. 19659003] Amount of the transaction: 3.4 billion dollars, a little over 3 billion euros, paid in cash by Atos and a premium of 14% compared to the Syntel price. This is one of the largest acquisitions of Atos. At the close of trading Friday, Syntel was valued 3.25 billion dollars.

In recent months, the French had warned that he was on the lookout for acquisitions, after the failure of the acquisition of Gemalto, in favor of Thales. In May, he won the bid for the American Six Payment via its Worldline subsidiary for 2.3 billion euros

Digital applications

Atos and Syntel have complementary activities. "Atos operates primarily on data processing, cybersecurity and infrastructure Thierry Breton. Tomorrow, we will strengthen the development of specific digital applications for our customers, it is a segment in strong growth.

Founded in 1980, Syntel has major clients in US financial services. It has 25,000 engineers, most of whom are located in India where Atos is also present.

In 2017, the American company has totaled $ 924 million in revenues, down 4.4% year-on-year for a profit of $ 166.3 million, after a loss of $ 57.4 million in 2016. The company has an operating margin of 25.5% compared to 27.1% a year earlier.

$ 250 million in revenue synergies

The French extended its footprint in the United States, its second largest region in terms of sales (behind Germany), which is now expected to generate $ 3 billion in revenue. In Uncle Sam's country, however, revenues fell in the first three months of the year due to management problems and a difficult infrastructure market.

Both companies expect significant synergies. "From 2019, the net result per share will be about 10%" ensures Thierry Breton. It also provides $ 120 million in cost synergies over the first three years following the acquisition; and $ 250 million in revenue synergies. That could give back to the title Atos, which remains discounted.

Fabienne Schmitt