France-based technology services company Atos announced that it is set to buy Michigan-based Syntel in an all-cash deal valued at about $3.57 billion.
Syntel will bring nearly $1 billion revenue with nearly 24 percent operating margin to Atos by strengthening worldwide Atos Digital solutions portfolio and business. The deal with also significantly accelerate Atos’ development in North America.
Syntel is a 38-year-old information technology services company with 23,000 employees in 30 countries, with over 18,000 staff based in India.
“The deal represents a transformational step for our Business & Platform Solutions Division as it will enhance its growth and profitability through an extended digital services offering, India-based delivery platforms, as well as revenue and cost synergies,” said Thierry Breton, chairman and CEO of Atos.
Syntel CEO Rakesh Khanna will become a member of Atos’ executive committee. The press release from Atos did not reveal the plans of Bharat Desai, co-chairman and co-founder of Syntel.
This transaction will generate $120 million of annual cost synergies by 2021 from G&A optimization taking advantage of the combined scale as well as the alignment of KPIs in Business & Platform Solutions.
Revenue synergies are expected to reach $250 million by 2021, through cross-selling opportunities at both the European and US customer bases, Atos said.
Syntel generated $924 million revenue in 2017, of which 89 percent was in North America, with 25 percent operating margin.
Atos focuses on digital transformation deals with enterprises. Atos, which has nearly 100,000 employees in 73 countries, clocked annual revenue of around €12 billion.