Atos boosts North American presence with Syntel buy 

Atos has bagged US-based IT company Syntel in an all-cash deal valued at about $3.57bn including net debt. Atos' CEO Thierry Breton says an incentive for the deal was Syntel’s strong know-how in digital fields, including cloud services, social media, mobile, analytics and automation.

The acquisition would also boost Atos’s presence in North America, where the company’s revenue fell unexpectedly in the first three months of the year. In particular, Syntel has strong relationships with financial services firms as well as companies in the health-care and retail sectors.

The match between the two companies offers multiple opportunities for revenue synergies, expected to reach circa $250m by the end of 2021 with around $50m operating margin through cross-selling opportunities on both European and US customer base, it says. 

Annual cost synergies are expected by the end of 2021 at circa $120m from G&A optimisation taking advantage of the combined scale as well as the alignment of KPIs in Business & Platform Solutions.

This acquisition is expected to be double digit accretive to Group EPS as early as 2019 as well as with a strong double digit EPS accretion with full run rate synergies after 3 years. 

Khanna Rakesh, CEO of Syntel, will become Atos Executive Committee member. 

Related Topics

Share this story