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French IT services provider Atos expands its presence in the United States with the acquisition of Syntel. The half-yearly results show that it is a difficult market.
Atos is Europe's leading provider of IT services. Today, the company takes over the American Syntel. (Image: Philippe Wojazer / Reuters)
Thierry Breton gave the Atos group a prominent face. Not only because the CEO of the French computer services provider of President Jacques Chirac has been Minister of Economy and Finance and has thus gained some notoriety in the country. Breton has transformed the business since he took over the operational activities of Atos in 2008, which helped him to occupy the position he occupies today. as the leading provider of IT services in Europe. This includes a number of partnerships and acquisitions, including the significant acquisition of Siemens' IT division in 2011, which Atos initially brought to its leading position, or where more recently, the card business of the six financial service provider. The last shot, and also one of the most important in the history of the company, has now been made in the United States. For $ 3.4 billion, the French group takes over the service provider based in Michigan, Syntel. Atos paid $ 41 in cash per share, which equates to a premium of about 14% over the average Syntel stock price over the past 30 days. The company, which still needs to be approved by the regulator, is expected to be completed by the end of the year.
An Appropriate Addition
Syntel, which employs 23,000 people, had a business turnover of $ 924 million last year, 89% of which was in North America. With this acquisition, Atos strengthens its presence in the United States where, in 2015, the company has already acquired Xerox's IT activities. Syntel, one of its hobbies, with cloud technology and the Internet of Things, counts among its clients many US financial service providers: American Express or State Street Bank, but also Fedex. Atos sees the acquisition as an addition to its portfolio and a way to progress in the development of applications.
The French, who also call themselves "Europe's Number One Digital Transformation Services", distinguish five business lines ranging from cloud management, data management and security infrastructures to coworking and payment communication solutions digital offers. Their clients include not only service companies, but also various sectors of the public sector in several countries. In addition, Atos has been the official IT partner of the International Olympic Committee since 2002 and is therefore responsible for measuring and acquiring results. The company's roots lie in the merger of two French IT service providers – Axime and Sligos – in 1997. Meanwhile, the Atos group, with two headquarters in Bezons near Paris and Munich, employs around 96,000 people. in 73 countries.
19659008] The purchase of Syntel is an initiative in a market that is the second most important for Atos after Germany and who hopes a lot of the group: Thierry Breton talked about a growth of 10% of the value per share from next year. However, US activity has recently proved difficult, partly because of market conditions, on the other hand due to staffing issues.
News of the takeover of Syntel, considered by some to be too expensive, only raised the price of the French listed CAC 40 index for a short time. The half-yearly figures published Monday are below expectations of investors, especially in the North American market. Surprising sales and margin losses resulted in a sharp drop in prices of around 7% in the afternoon. The group's results also did not meet analysts' expectations. The turnover grew by 1.7% to 6.01 billion euros and the operating income grew by 4.4% from one year to the end of the year. another to 342 million euros. Atos has established a sales growth of between 2 and 3% in the publication of its annual targets and confirmed it on Monday.
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