Capgemini has entered into exclusive negotiations to acquire Altran for 3.6 billion euros. The combination will create a global leader in digital transformation for industrial and tech companies, with revenues of 17 billion euros and more than 250,000 employees. The exact implications for the Dutch and Belgian activities will become clear after completion of the deal, which is expected by the end of 2019. Both Boards of Directors unanimously recommend and approve the agreement. In addition, Capgemini has signed a definitive agreement to acquire shares representing 11 percent of Altran capital from a group of shareholders led by Apax Partners.
Altran is a worldwide provider of engineering and R&D services. For more than 35 years, it has been working with major players in many sectors, including automotive, aerospace, consumer, defense, infrastructure, life sciences, semicon and software. The company generated 2.9 billion euros in revenue in 2018, with nearly 47,000 staff in more than 30 countries. In the Netherlands, it employs about 900, servicing companies like ASML, Philips and Thales from offices in Eindhoven, The Hague, Helmond, Hengelo, Leek, Utrecht and Zwolle. Altran gained its foothold here by acquiring Tass in 2014 and Nspyre in 2015 (links in Dutch).
Capgemini is a global leader in consulting, IT services and digital transformation. The group has over 200,000 employees in more than 40 countries. It had a turnover of 13.2 billion euros in 2018. With its technology and engineering services division, Sogeti, the company is also active in the Benelux high tech.
The combination of forces 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. Over the medium-term, engineering and R&D services are anticipated to grow by around 9 percent annually. The combined scope of these activities will represent annual revenues of approximately 3.4 billion euros 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.
Paul Hermelin, Chairman and CEO of the Capgemini Group, 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. 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.”
Capgemini intends to launch a cash offer for all Altran share capital at a price of 14 euros per share. This represents a premium of 30 percent over the volume-weighted average share price over the month until 21 June and a 33 percent premium over the 3-month volume weighted average. Capgemini has secured a bridge financing of 5.4 billion euros, 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 euros and the balance by debt issuance, primarily new bond issues.