IT Staffing Report: May 14, 2015

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Capgemini to acquire IGATE for $4.0 billion

Capgemini Group, a Paris-based IT services firm, entered into a definitive merger agreement to acquire IGATE Corp. (NASD: IGTE) for a cash consideration of $48 per share. The transaction will amount to $4.0 billion.

New Jersey-based IGATE, a technology and services company, reported 2014 revenue of $1.3 billion. The acquisition will make North America Capgemini’s largest region, representing 30% of Capgemini Group’s estimated combined revenue of €12.5 billion in 2015. An estimated 50,000 employees will serve Capgemini’s North American clients.

The acquisition bolsters Capgemini’s sector expertise notably in financial services, which comprises 42% of IGATE’s revenue. The firms said the deal also brings a portfolio of major clients complementary to those of Capgemini; reinforces Capgemini’s position in the retail, manufacturing and healthcare sectors; and prompts a faster transition to platform-based solutions.

The proposed transaction will consist of a one-step cash merger between IGATE and a subsidiary of Capgemini North America Inc. The merger has been approved by the written consent of IGATE Corp. shareholders representing approximately 54% of the capital; it is subject to a 30-day period during which IGATE Corp. could accept a superior proposal.

The transaction is expected to close in the second half of 2015 and is subject to the customary closing conditions, including regulatory approvals. The new organization will be in place within three months of closing and the integration is expected to be completed within nine months.

“I am very pleased to announce a very important transaction in Capgemini’s history,” said Capgemini Chairman and CEO Paul Hermelin.

“IGATE is a leading company that perfectly fits our strategic ambition,” Hermelin said. “It will give us a new status on the American market, and take further our industrialization journey to offer ever more competitive services to our clients. This will also give to the group’s Indian operations a new scale, allowing us to compete on par with the best US-based and Indian-based companies. I am glad to welcome new talents and leaders to our Group, who share our convictions and professional culture.”

Capgemini provides consulting, technology and outsourcing services and has more than 145,000 people in more than 40 countries. The Group reported 2014 global revenues of €10.573 billion.