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Capgemini and IGATE announced that they have entered into a definitive merger agreement under which Capgemini will acquire IGATE for a cash consideration of $48 per share. The transaction will amount to $4.0 billion and is expected to be immediately accretive to Capgemini’s normalized Earnings Per Share (EPS). The merger agreement has been approved unanimously by both Capgemini’s and IGATE’s Board of Directors. The transaction has also been approved by the written consent of shareholders holding a majority of IGATE’s shares.
This transaction would lead to a group with an estimated combined revenue of €12.5 billion in 2015, an operating margin above 10% and around 190,000 employees. The combined Group will pass the 100,000 employees landmark in its Rightshore delivery centers in 2015.
This transaction fulfills one of the essential components of Capgemini’s strategy in expanding its presence in the North American market, the press release said.
Transaction highlights
The contemplated transaction will consist in a one-step cash merger between IGATE Corporation and a subsidiary of Capgemini North America Inc. The merger has been approved by the written consent of IGATE Corporation shareholders representing approximately 54% of the capital (subject to a 30-day fiduciary out period during which IGATE Corporation could accept a superior proposal).
The merger is subject to the customary closing conditions, including regulatory approvals. The transaction is expected to close in the second half of 2015.
This transaction will be financed through a combination of:
- own cash
- equity portion translating into a dilution not to exceed 6% of Capgemini share capital
- straight debt for the remaining portion.
Paul Hermelin, Chairman and CEO of Capgemini, said: “IGATE is a leading company that perfectly fits our strategic ambition. 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. ”
Ashok Trivedi, Co-Founder and Co-Chairman of IGATE said: “We are pleased to have found a great partner for the business and are confident that our employees and customers will benefit from the enhanced service offerings and resources available to them at Capgemini.”
Sunil Wadhwani, Co-Founder and Co-Chairman of IGATE said: “We are gratified that the company we founded over 25 years ago has developed into a global enterprise with over 30,000 employees, a trusted partner to over 250 clients, a market value of over $4 billion, and one of the most respected brands in the IT industry.”
