Atos, a global leader in digital transformation has agreed to acquire Syntel, a leading global provider of integrated IT and knowledge process services for aggregate consideration of $3.4 billion.
Thierry Breton, Chairman and CEO, Atos said, “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.”
Bharat Desai, Co-Chairman and Co-founder, 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.
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.
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.
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.
Strong portfolio and complementary customer base between the two companies will generate multiple cross-selling opportunities, many of them already identified, leading to revenue synergies of $250 million to be achieved by the end of 2021, half of them by the end of 2020, with $50 million operating margin.
Syntel executives and management will join Atos leadership team in order to help achieve the combined Group’s strong ambitions. The Group will apply its integration methodology as successfully rolled out in past acquisitions. The Group will deeply involve key managers in its development and in particular is glad to announce that Syntel CEO Rakesh Khanna will join Atos’ Executive Committee.
Each of the Atos and Syntel Board of Directors has unanimously approved the transaction. The transaction is expected to close by year-end 2018.