IT Intelligence Bulletin (HG Insights) — Atos has announced its agreement with Syntel with respect to the acquisition by Atos of Syntel, for an aggregate consideration of c.$3.4 billion or $41.0 per Syntel share.

The transaction represents c. 14% premium over the 30 trading days volume weighted average share price. The transaction is structured as a one-step cash merger between Syntel and Atos requiring above 50% of Syntel outstanding share capital to execute the merger. On July 20, 2018, the Board of Directors of Syntel unanimously approved the transaction based on the unanimous recommendation of a special committee of the Syntel Board. Written voting agreements with Syntel shareholders, including founders, to vote in favor of the transaction represent 51% of the outstanding shares. The Board of Directors of Atos meeting held on July 20, 2018 also expressed its full and unanimous support for the transaction.

Thierry Breton, Chairman and CEO of Atos said: “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. 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 services offering, cutting-edge India-based delivery platforms, as well as revenue and cost synergies. 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. I am looking forward to welcoming the 23,000 Syntel engineers and their very strong management to continue delivering together the highest value to our clients and shareholders.”

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Bharat Desai, Co-Chairman and Co-founder of 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. 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. 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.”

The combination of the two companies will allow Atos to deliver a unique portfolio for end-to-end digital transformation to customers. This will translate in already identified and actionable initiatives to generate revenue synergies in the following areas:

  • Leverage Syntel’s portfolio in particular digital services, intelligent automation and IT modernization into Atos Clients into North America and Europe
  • New Global capabilities to capture large End-to-End Digital Transformation projects
  • Leverage Atos’ portfolio with Syntel Base in Cybersecurity, Big data, IDM and other Atos services

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