Capgemini: the success story

26/06/2019 -
Capgemini se dit confiant pour 2019 prévoit d’améliorer sa marge

Capgemini is without a doubt one of the most beautiful French success stories of the past 25 years. Created in 1967 by Serge Kampf, under the name of Sogeti, Capgemini has risen in over 50 years to become the undisputed leader in France for services and software engineering. From 27,000 employees a little over 20 years ago, Capgemini is expected to reach a little over 250,000 employees by the end of the year…

Investors have indeed welcomed the friendly takeover bid of Altran Technologies by Cap Gemini made public in the evening of the 26th of June.

 

Paul Hermelin et Dominique Cerutti
REUTERS I Charles Platiau Paul Hermelin, President and CEO of Capgemini, and Dominique Cerutti, President and CEO of Altran, shake hands after a press conference in Paris, France, on June 25, 2019. ©Reuters

 

This future acquisition of the latter by the former, validated by the two boards of directors, caused a surge (+ 8.44%) in the stock price of the French consulting and computer services  giant yesterday while the stock of the Engineering and R & D consulting firm  was up 22.19% to 14,015 euros at closing, a little higher than the price offered by Capgemini (14 €).

This merger will lead to the creation of a group employing more than 250,000 people. Synergies are expected to add an additional 300 to 350 million euros to the turnover, to reach a total of about 17 billion euros!


Already at the brink of entering the world’s top 5, there is no doubt that Capgemini through this acquisition, already present in more than 40 countries, has not finished growing.

 

Paul Hermelin, the CEO of Capgemini, quotes in the statement issued by the two companies that this marriage gives birth to “a world leader in the digital transformation of industrial and technology companies.” “The complementarity and the power of our expertise are major assets”, he explained. “This acquisition will enable us to become a strategic partner for our clients, enabling them to reap the full benefits of the deployment of the cloud, the Internet of Things, Edge computing, artificial intelligence and the 5G “.

Now missing only some regulatory approvals (especially from the CFIUS in the US, responsible for analyzing business acquisitions, it must take a decision on the acquisition of LiquidHub by Capgemini in 2008) for this bid to be finalized and for Capgemini to continue on impressing…

 

Analysts for their part, see very favorably this operation

  • Invest Securities summarizes the strategic reasoning behind Capgemini’s transaction: “to strengthen massively in engineering, where it was marginally present with its subsidiary Sogeti, in order to capture the growth of this dynamic market.”

  • UBS also emphasizes the complementarity of Capgemini’s business lines with those of Altran. Specialized in engineering and outsourced R & D services, Altran employs nearly 50,000 people, “including 17,500 in low-cost countries”, while at Capgemini, these activities currently employ only around 6,000 employees. The range of services offered by the new group will, therefore, expand significantly.

  • Oddo BHF writes: “This operation should surprise the market by its magnitude because the management of Capgemini had regularly announced its desire to carry out targeted operations. However, this operation is of strategic interest and is carried out at a good price while allowing to generate synergies for a limited risk of integration. “

 


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Marc de Saqui de Sannes

Marc de Saqui de Sannes