Atos, the leading IT services provider, is growing its reach by acquiring industry peer Syntel for $3.4 billion or $41 per Syntel share.
Based in France, Atos is a global leader in digital transformation technologies including big data, cybersecurity, high performance computing, and digital workplace. The company generated a revenue of around $15 billion in 2017.
“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,” said Thierry Breton, Chairman and CEO of Atos.
“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 service offering, cutting-edge India-based delivery platforms, as well as revenue and cost synergies.”
Atos is rapidly growing its presence in North America. In 2015, it acquired IT services business of Xerox for $966 million, and now the Syntel acquisition will further help Atos to expand its reach and provide end-to-end services to US customers.
“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,” added Breton.
Other than bigger footprint in US, the acquisition will help Atos to bolster its position in global banking, finance, and insurance markets. Syntel will also bring a broad set of digital and proprietary solutions which include cloud, mobile, internet of things (IoT), automation, and social media.
“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,” said Bharat Desai, Co-Chairman and Co-founder of Syntel.
“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.”
Atos expects an annual cost synergy of $120 million by 2021 through the optimized general and administrative expenses, and open $250 million opportunities in new revenue by 2021.
The transaction is expected to close later this year, with 23,000+ employees of Syntel joining Atos.