Atos to acquire Syntel

Atos to acquire Syntel

The transaction represents c. 14% premium over the 30 trading days volume weighted average share price. The transaction is structured as a one-step cash merger between Syntel and Atos requiring above 50% of Syntel outstanding share capital to execute the merger.

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Atos (EURONEXT PARIS:ATO), announced its agreement with Syntel (NASDAQ:SYNT), a leading global provider of integrated information technology and knowledge process services, with respect to the acquisition by Atos of Syntel, for aggregate consideration of c.$3.4 billion or $41.0 per Syntel share.

The transaction represents c. 14% premium over the 30 trading days volume weighted average share price. The transaction is structured as a one-step cash merger between Syntel and Atos requiring above 50% of Syntel outstanding share capital to execute the merger. On July 20, 2018, the Board of Directors of Syntel uninamously approved the transaction based on the unanimous recommendation of a special committee of the Syntel Board. Written voting agreements with Syntel shareholders, including founders, to vote in favor of the transaction represent 51% of the outstanding shares.

Atos and Syntel have entered into a definitive merger agreement under which Atos will acquire Syntel for cash consideration of c. $ 3.4 billion i.e. $ 41.0 per share, representing c. 14% premium over the last 30 trading days volume weighted average share price of Syntel. Syntel brings a powerful suite of digital and proprietary solutions recognized by top analysts as being among the most advanced: cloud, social media, mobile, analytics, IoT, and automation at c. 40% of Syntel’s revenue.

The Board of Directors of Atos meeting held on July 20, 2018 also expressed its full and unanimous support for the transaction.

Thierry Breton, Chairman and CEO of Atos said: ”I am very proud to announce such an important milestone in Atos’ leadership development with the acquisition of Syntel, a leading digital company, established 38 years ago, that perfectly fits our strategic priorities. 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 particular, the highly complementary portfolio, customer base, and geographic footprint of the combination between Atos and Syntel will significantly enhance our presence in North America and accelerate the digital transformation of Atos’s customers worldwide.

I am looking forward to welcoming the 23,000 Syntel engineers and their very strong management to continue delivering together the highest value to our clients and shareholders.

Bharat Desai, Co-Chairman and Co-founder of Syntel, said: “This is a very exciting development for Syntel. The Syntel board is committed to maximizing shareholder value and believes that the agreement with Atos achieves that objective and delivers a win-win proposition to our customers and employees.

Our focus at Syntel is to help customers transform and succeed in the digital economy. Since its founding, our “Customer for Life” ethos has guided our investments in high-impact, domain-led services and intellectual property.

I am grateful for the trust and confidence of our customers and the passion, commitment and innovative spirit of our employees. Together they have enabled Syntel to achieve great heights. I am confident that this combination will deliver significant value to all stakeholders.

A perfect match with Atos to enhance its digital transformation factory

With its innovative business model aligned to its client’s business challenges, Syntel generated $924 million revenue in 2017, of which 89% was in North America, with 25% operating margin. The Group employs 23,000 engineers in 30 countries, with over 18,000 staff based in India. All of Syntel’s management team is expected to join Atos.

To strengthen Atos’ digital capabilities and existing Business & Platform Solutions and accelerate its Digital strategy

This transaction is a major step in the strategy of Atos to reach a global scale and significantly expand in both Digital services and Business & Platform Solutions. The two organizations are fully complementary in their customer base, geographies, and services. Syntel will enhance Atos’s Digital Transformation Factory thanks to a powerful suite of digital and proprietary solutions recognized by leading industry analysts as being the most advanced in Cloud, Social Network, Mobile, Analytics, Cloud and IoT.

To add Business & Platform Solutions activities in North America

As part of this transaction, upon closing Atos will immediately gain a significant scale in its Business & Platform Solutions Division in North America allowing it to address its existing client base and to offer them high value-add digital services in several specific verticals such as Banking and Financial Services, Healthcare, Retail, Logistics, Manufacturing, and Insurance. Atos will also improve its margin profile in North America.

To significantly strengthen the Group’s Business & Platform Solutions Division with best-in-class delivery platform generating among the highest margins of the industry

Syntel will bring strong capabilities thanks to its best-in-class delivery platform which generates, through its state of the art delivery process, among the the highest margins in the B&PS industry. Syntel offers secure and technically advanced offshore environment with world class-campuses in India, securing access to a talent pool of over 18,000 employees.

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