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2019 Press Releases

June 25, 2019

Capgemini and Altran create a global digital transformation leader for industrial and tech companies

Capgemini, a global leader in consulting, IT services and digital transformation, and Altran Technologies, the global leader in Engineering and R&D services, have entered into an agreement for exclusive negotiations whereby Capgemini is to acquire Altran, through a friendly takeover bid at €14.00 per Altran share, payable in cash.

The total cash consideration will amount to €3.6 billion, excluding net financial debt (c. €1.4 billion). The transaction will be accretive to Capgemini’s normalized EPS by more than 15%, before synergies from the combination. In 2023, accretion is expected to exceed 25% post synergies. The agreement is unanimously recommended and approved by the Boards of Directors of Capgemini and Altran. In addition, Capgemini has signed a definitive agreement to acquire shares representing 11% of Altran capital from a group of shareholders led by Apax Partners.

Paul Hermelin, Chairman and Chief Executive Officer of the Capgemini Group, said: "This proposed combination  enables Capgemini to take the lead in a very promising market segment—what we call ‘Intelligent Industry’ or the digital transformation of industrial and tech companies. The complementarity and power of our combined business and technological expertise are truly outstanding assets. By joining forces, we are positioning ourselves as a clear strategic partner to assist our clients in taking full advantage of the revolution created by the developments of the cloud, Edge computing, IoT, artificial intelligence and 5G. I am delighted to welcome to Capgemini the talents and leaders of Altran, who share our beliefs and corporate culture.”

Dominique Cerutti, Chairman and Chief Executive Officer of the Altran Group, added: "The proposed combination of Altran with Capgemini is perfectly aligned with the vision set out in our strategic plan. While technological disruptions and the digitalization of industries are accelerating, Altran has developed new service models and strengthened its leadership with a high value-added offer for its customers' Engineering and R&D activities. In an industry that is consolidating rapidly there is no doubt that Capgemini is the ideal partner to build together a world leader in digital transformation. This transaction will create value for our customers, and is an outstanding opportunity to showcase the talent of our teams.” 

Two industry leaders join forces
Capgemini is a world leader in consulting, IT services and digital transformation. Altran is the world leading provider of Engineering and R&D services, with a portfolio of high-profile clients, extensive sector expertise and in-depth understanding of industrial business processes and operational technologies.
The combination of the two companies will create a group with revenues of €17 billion and more than 250,000 employees. This new entity will leverage its unique positioning in particularly promising segments.

Through its enhanced scale and broad services portfolio, the combined group will benefit from increased access to key decision-makers from key accounts in dynamic industries (such as Aerospace, Automotive, Life Sciences and Telecommunications) including R&D, manufacturing and supply chain CxOs.

This transaction allows Capgemini to accelerate its development with major Internet and tech companies, by giving the new entity a critical mass in software engineering through centers of expertise, particularly in India and Eastern Europe. The Group aims to become a major player in this key market.

Strengthened leadership in the fast-growing market of Engineering and R&D services
Over the medium-term, Engineering and R&D (ER&D) services are anticipated to grow by around 9% annually. The new entity will be the world’s top player in ER&D by size (notably in the USA and in Europe), with unique sector expertise.

The combined scope of these Engineering and R&D services activities will represent annual revenues of approximately €3.4 billion6 and 54,000 professionals, including 21,000 in 5 Global Engineering Centers.

Building on its track record in industrialization and innovation, Capgemini will strengthen Altran's deployment of its segmented model of services (high value-added services, traditional services, Industrialized Globalshore®) to support customers throughout the entire life cycle of their products and services.

Introducing a world leader in "Intelligent Industry"
The new Group will benefit from a unique ability to support industrial players in their digital transformation, by combining its intimate knowledge of their businesses, its privileged access to decision-makers and its portfolio of offers that spans digital transformation, consulting and innovation, information technologies (IT) and operational technologies7 (OT). Building on these strengths, Capgemini will reinforce its role as the strategic partner of choice of its customers in this "Intelligent Industry" spacewhich present a double-digit growth potential.

Strong value creation
The Group expects accretion to normalized EPS, before synergies from the combination, of more than 15% in the first year after closing.

Cost and operating model synergies are anticipated to reach an annual pre-tax run rate between €70 and €100 million in 3 years. At that point in time, commercial synergies should generate between €200 million and €350 million in additional annual revenues, from cross-selling and the development of innovative sectorial offers.

In 2023, with the benefits of these synergies, the accretion on normalized earnings per share should exceed 25%.

Integration facilitated by cultural proximity and a similar operating model
With both companies built on engineering talent and traditions, Capgemini and Altran have a very close corporate culture that will facilitate a smooth integration of their teams. The two groups also have very similar operating models with many operational indicators in common.

The combined Group will continue to invest massively in its talents, opening up a host of opportunities for the employees of both entities.

Key transaction terms
The agreement sets out the key terms and conditions of the proposed transaction, organizes the information or consultation process by Capgemini and Altran of their respective works councils and contains in particular an exclusive commitment by Altran.
Capgemini intends to launch a cash offer for all Altran share capital at a price of €14.00 per share. This represents a premium of 30% over the volume-weighted average share price over the month until Friday 21 June (adjusted for the €0.24 coupon to be detached on July 1st) and a 33% premium over the 3-month volume weighted average price.

The total cash consideration will amount to €3.6 billion, before taking into account net financial debt (c.  €1.4 billion).

Capgemini has signed a definitive agreement to acquire an 11% stake in Altran from the concert formed around Apax Partners (comprising possible customary top-ups).

The public offer launch is expected to take place after the information or consultation phase of the respective works councils, and after the customary regulatory approvals have been received, notably CFIUS in the United States and antitrust authorities. However, the Group reserves the right to launch the public offer before these regulatory approvals are received.

The completion of this combination is expected by the end of 2019.