– FRANCE, Paris – Capgemini (EPA:CAP), a global leader in consulting, IT services and digital transformation, and Altran Technologies (EPA:ALT), the global leader in Engineering and R&D services, today announced that they have entered into an agreement for exclusive negotiations whereby Capgemini is to acquire Altran, through a friendly takeover bid at €14.00 per Altran share, payable in cash.
The total cash consideration will amount to €3.6 billion, excluding net financial debt (c. €1.4 billion). The transaction will be accretive to Capgemini’s normalized EPS by more than 15%, before synergies from the combination. In 2023, accretion is expected to exceed 25% post synergies. The agreement is unanimously recommended and approved by the Boards of Directors of Capgemini and Altran. In addition, Capgemini has signed a definitive agreement to acquire shares representing 11% of Altran capital from a group of shareholders led by Apax Partners.
Paul Hermelin, Chairman and CEO Capgemini said: “This proposed combination enables Capgemini to take the lead in a very promising market segment—what we call ‘Intelligent Industry’ or the digital transformation of industrial and tech companies. The complementarity and power of our combined business and technological expertise are truly outstanding assets. By joining forces, we are positioning ourselves as a clear strategic partner to assist our clients in taking full advantage of the revolution created by the developments of the cloud, Edge computing, IoT, artificial intelligence and 5G. I am delighted to welcome to Capgemini the talents and leaders of Altran, who share our beliefs and corporate culture.”
Dominique Cerutti, Chairman and CEO Altran, added: “The proposed combination of Altran with Capgemini is perfectly aligned with the vision set out in our strategic plan. While technological disruptions and the digitalization of industries are accelerating, Altran has developed new service models and strengthened its leadership with a high value-added offer for its customers’ Engineering and R&D activities. In an industry that is consolidating rapidly, there is no doubt that Capgemini is the ideal partner to build together a world leader in digital transformation. This transaction will create value for our customers, and is an outstanding opportunity to showcase the talent of our teams.”
Capgemini is a world leader in consulting, IT services and digital transformation. Altran is the world-leading provider of Engineering and R&D services, with a portfolio of high-profile clients, extensive sector expertise and in-depth understanding of industrial business processes and operational technologies.
The combination of the two companies will create a group with revenues of €17 billion2 and more than 250,000 employees. This new entity will leverage its unique positioning in, particularly promising segments.
Through its enhanced scale and broad services portfolio, the combined group will benefit from increased access to key decision-makers from key accounts in dynamic industries (such as Aerospace, Automotive, Life Sciences, and Telecommunications) including R&D, manufacturing and supply chain CxOs.
This transaction allows Capgemini to accelerate its development with major Internet and tech companies, by giving the new entity a critical mass in software engineering through centers of expertise, particularly in India and Eastern Europe. The Group aims to become a major player in this key market.
Over the medium-term, Engineering and R&D (ER&D) services are anticipated to grow by around 9% annually. The new entity will be the world’s top player in ER&D by size (notably in the USA and in Europe), with unique sector expertise.
The combined scope of these Engineering and R&D services activities will represent annual revenues of approximately €3.4 billion and 54,000 professionals, including 21,000 in 5 Global Engineering Centers.
Building on its track record in industrialization and innovation, Capgemini will strengthen Altran’s deployment of its segmented model of services (high value-added services, traditional services, Industrialized Globalshore®) to support customers throughout the entire life cycle of their products and services.
The new Group will benefit from a unique ability to support industrial players in their digital transformation, by combining its intimate knowledge of their businesses, its privileged access to decision-makers and its portfolio of offers that spans digital transformation, consulting and innovation, information technologies (IT) and operational technologies. Building on these strengths, Capgemini will reinforce its role as the strategic partner of choice of its customers in this “Intelligent Industry” space, which presents a double-digit growth potential.
Cost and operating model synergies are anticipated to reach an annual pre-tax run rate between €70 and €100 million in 3 years. At that point in time, commercial synergies should generate between €200 million and €350 million in additional annual revenues, from cross-selling and the development of innovative sectorial offers.
With both companies built on engineering talent and traditions, Capgemini and Altran have a very close corporate culture that will facilitate a smooth integration of their teams. The two groups also have very similar operating models with many operational indicators in common.
The combined Group will continue to invest massively in its talents, opening up a host of opportunities for the employees of both entities.
Capgemini intends to launch a cash offer for all Altran share capital at a price of €14.00 per share. This represents a premium of 30% over the volume-weighted average share price over the month until Friday 21 June (adjusted for the €0.24 coupon to be detached on July 1st) and a 33% premium over the 3-month volume weighted average price.
The total cash consideration will amount to €3.6 billion, before taking into account net financial debt (c. €1.4 billion).
Capgemini has signed a definitive agreement to acquire an 11% stake in Altran from the concert formed around Apax Partners (comprising possible customary top-ups).
The public offer launch is expected to take place after the information or consultation phase of the respective works councils, and after the customary regulatory approvals have been received, notably CFIUS in the United States and antitrust authorities. However, the Group reserves the right to launch the public offer before these regulatory approvals are received.
The completion of this combination is expected by the end of 2019.
Capgemini has secured a bridge financing of €5.4 billion, covering the purchase of securities (€3.6 billion) as well as the gross debt (€1.8 billion).
It plans to refinance the bridge with available cash for €1 billion and the balance by debt issuance, primarily new bond issues.
Capgemini is a global leader in consulting, IT services and digital transformation. At the forefront of innovation, the Group helps its customers to seize all the opportunities presented by the cloud, digital, and platforms. With 50 years of experience and extensive expertise in the various sectors of activity, he assists companies and organizations in achieving their ambitions, from the definition of their strategy to the implementation of their operations. For Capgemini, it is men and women who value technology. Resolutely multicultural, the Group has more than 200,000 employees in more than 40 countries. It had a turnover of €13.2 billion in 2018.
For more information, visit www.capgemini.com.
Altran is the undisputed world leader in engineering and R&D services. The Group offers its customers a unique value proposition to meet their transformation and innovation challenges. Altran supports its customers, from concept to industrialization, to develop the products and services of tomorrow. Altran has been working for more than 35 years with major players in many sectors: Automotive, Aeronautics, Space, Defence & Naval, Rail, Infrastructure & Transport, Industry & Consumer Products, Life Sciences, Communications, Semiconductor & Electronics, Software & Internet, Finance & Public Sector. The acquisition of Aricent expands the Group’s portfolio of expertise in semiconductors, digital experience and design innovation. Altran generated €2.9 billion in revenue in 2018, with nearly 47,000 employees in more than 30 countries.
For more information, visit www.altran.com
- Disclaimer - News, data and statement included in this release are intended exclusively for general information purposes. Talent4Boards accepts neither liability for the consequences of the reader’s reliance, nor responsibility for the adequacy or accuracy of the information. No data or statement in this release should be considered for decisions about securities referred. Product and brand names used in this release maybe trademarks or registered trademarks of their respective owners.
Comments are closed.