Atos to acquire digital dynamo Syntel for $3.4bn
European IT services company Atos will acquire Michigan-based digital solutions provider Syntel for $3.4 billion as it seeks to expand its capabilities in North America and improve its banking, finance and insurance services.
According to Atos, Syntel brings a suite of digital and proprietary solutions – such as cloud, social media, mobile, analytics, internet of things (IoT), and automation.
Thierry Breton, chairman and CEO of Atos, says: “It represents a transformational step for our Business & Platform Solutions Division as it will significantly enhance its growth and profitability profile through an extended digital services offering, cutting-edge India-based delivery platforms, as well as revenue and cost synergies.”
In terms of these “synergies”, this is expected to reach c. $250 million by 2021, through cross-selling at its European and US customer bases.
Syntel generated $924 million revenue in 2017, of which 89% was in North America, with a 25% operating margin. The group employs 23,000 engineers in 30 countries, with over 18,000 staff based in India.
There were no details about any planned redundancies, but Atos says it will get those 23,000 engineers and “all of Syntel’s management team is expected to join Atos”.
Rakesh Khanna CEO of Syntel will become a member of Atos’ executive committee.
The transaction is planned to close by year-end. Both companies’ boards of directors have unanimously approved the transaction.
Atos must be pleased that it got this deal done. You may recall back in December 2017, it made a €4.3 billion bid for Gemalto, the world’s biggest maker of SIM cards, in an attempt to create an industry powerhouse in markets for cybersecurity and digital products.
However, it got outmanoeuvred. Gemalto execs gasped in amazement as Thales unleashed its offer of €4.76 billion.