French IT services company Atos is boosting its North American operations with a US$3.4 billion cash deal to buy Michigan-based IT services provider Syntel Inc., Reuters reports.
Atos, which provides IT services to sectors ranging from aerospace to retail, said the deal to buy Syntel will strengthen its activities in banking, finance and insurance and allow it to provide complete IT solutions to its US customers.
“[The deal] will significantly enhance [the Business & Platform Solutions Division’s] growth and profitability profile through an extended digital services offering, cutting-edge India-based delivery platforms, as well as revenue and cost synergies,” Atos chief executive Thierry Breton said in a statement.
The acquisition of Syntel, a 38-year-old company with 23,000 employees, comes after last year’s unsuccessful attempt by Atos to buy digital security firm Gemalto.
Syntel provides technology and IT services utilizing a network of software development centers in India.
Atos will pay US$41 per share, a premium of 4.78 percent to Syntel’s closing price of US$39.13 on Friday. Including net debt, the transaction is valued at about US$3.57 billion.
Atos said it expects the deal to provide double-digit earnings per share growth from 2019, with Syntel bringing the group around US$1 billion in revenue and an operating margin of around 24 percent.
Atos’ payments division Worldline on Monday reported half-yearly organic revenue growth of 5.8 percent and announced a deal to process payments for Commerzbank.
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