Capgemini acquires Altran Technologies for €3.7B

By Niclas Hallberg (London School of Economics) and Vincent Wess (WHU - Otto Beisheim School of Management) | 16/02/2020


Overview of the deal

Acquirer: Capgemini SE

Target: Altran Technologies SA

Estimated value: $3.7B

Announcement date: 24.06.2019

Acquirer Advisors: Lazard

Target Advisors: Perella Weinberg Partners

Capgemini and Altran are closing in on creating a global leader in the digital transformation consulting landscape. After asserting that its June 2019 offer of €14.00 per share was final, Capgemini increased its tender offer for Altran mid-January 2020 to €14.50, thereby increasing Altran’s valuation from €3.6B to €3.7B.

The sweetened bid was to convince a majority of Altran’s shareholders to sell their shares, after the deal stalled thanks to opposition from US activist hedge fund Elliott Management. Elliott, who own about 14% of Altran’s equity, have argued that Capgemini was undervaluing Altran, hence making shareholders hesitant to sell at the current valuation of €3.6B. On January the 22nd, Capgemini managed to acquire 53.6% of Altran’s shares.

Paul Hermelin, Capgemini’s CEO, thereby secured the consultancy’s biggest deal in a decade. Even though Capgemini will struggle to fully acquire Altran, the majority shareholding will lead to plenty of cross-selling opportunities and cost savings in the future, making the deal highly accretive.

Company Details (Acquirer - Capgemini SE)

Capgemini is a global leader in the provision of consulting, technology, digital transformation and outsourcing services to its clients. Founded by Serge Kampf in 1967, the French multinational has a strong focus on transforming businesses through the adequate implementation of technology. The group has two specialized subsidiaries: Capgemini Invent provides services based around digital innovation, while Sogeti operates on a local level, deploying expert teams that aim to implement existing technologies in businesses.

- Founded in 1967

- CEO: Paul Hermelin

- Number of employees: 225,000

- Market Cap: $19.6bn - EV: $21.9bn

- LTM Revenue: $ 13.7bn - LTM EBITDA: $1.8bn

- LTM EV/Revenue: 1.59x - LTM EV/EBITDA: 12.33x

Company Details (Target - Company Name)

Altran is the global leader in engineering and innovation consulting. Headquartered in Paris, it specialises in advising its clients, some of the world’s largest corporations, on the implementation of high technology in their businesses, making up 75% of its revenues. The remaining revenue is generated through information, administrative and management consulting.

- Founded in 1982

- CEO: Dominique Cerutti

- Number of employees: 50,000

- Market Cap: $3.8bn - EV: $5.7bn

- LTM Revenue: $3.3bn - LTM EBITDA: $330m

- LTM EV/Revenue: 1.71x - LTM EV/EBITDA: 17.03x

Projections and Assumptions